Dairy Industry Debate
Full Debate: Read Full DebateDepartment: Department for Environment, Food and Rural Affairs
Alan Reid
Main Page: Alan Reid (Liberal Democrat - Argyll and Bute)Department Debates - View all Alan Reid's debates with the Department for Environment, Food and Rural Affairs
(9 years, 9 months ago)
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Mr Alan Reid (Argyll and Bute) (LD)
I congratulate my hon. Friend the Member for Ribble Valley (Mr Evans) on initiating this important debate. The fall in the milk price is causing serious problems for British dairy farmers. In my constituency, dairy farmers are mainly concentrated in Kintyre and the Isle of Bute. There are many dairy farms in Kintyre and the industry is a vital part of the local economy, which would struggle without it. As well as direct employment in the farms themselves, the dairy industry supports many other local businesses, including the Campbeltown creamery, which makes the famous Mull of Kintyre cheddar. I urge First Milk to invest in the creamery to secure its future and that of the local dairy industry. Grants from the Scottish Government have been offered, provided that First Milk makes its own investment.
Although there is widespread agreement that dairy demand will outstrip supply in the long term, which will create real opportunities for the UK dairy supply chain in the future, farmers have to survive the current crisis. EU intervention should be considered until the situation with the Russian import ban and other market forces has been resolved. Price intervention is set too low to have any effect before the situation becomes even more serious.
Like most hon. Members who have spoken, I welcome the Government’s decision to grant the Groceries Code Adjudicator the power to fine supermarkets that have breached the groceries code, and I hope that that will act as a deterrent to supermarkets. However, many dairy farmers do not fall within the scope of the groceries code because they do not sell directly to supermarkets, so the code must be extended to include complaints from indirect suppliers such as dairy farmers. The code is not due to be reviewed until next year, I believe, but I urge the Government to bring the review date forward.
The adjudicator should be able to be proactive, and should be seen as a genuine threat to those who breach good practice. In times of price falls, it is the primary producer—the dairy farmer—whose business is impacted by the low prices. Those further up the supply chain pass price cuts down the chain, but the long-suffering dairy farmer has nobody else to pass a price cut to, and they have to take the hit.
HMRC must also be more helpful by allowing dairy farmers to spread profits over several years. I urge the Government to take the steps that I have outlined to help the dairy industry survive the current crisis and secure a good long-term future.