Dairy Industry

David Heath Excerpts

Wednesday 5th November 2014 Westminster Hall

[Mr David Heath (Somerton and Frome) (LD)]

It is a pleasure to join the debate. I congratulate the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart). It is good at last to have a voice in the debate from the west country of England, where an awful lot of the finest dairy land in the country is. I shall not get into an argument about whether our milk and cheese is better than anyone else’s, because we know the answer to that in Somerset.

The point made by the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) about the undervaluing of milk is crucial. How can it be that I can go down to the Members’ Tea Room, in this very building, and buy a silly little bottle of water, without even bubbles in it—a pint of water for 85p; and Iceland supermarket can sell 4 pints of milk for 89p? Where is the logic in that? It is outrageous that milk is undervalued to that extent.

There are clearly issues of over-supply and reduction in world demand, but the fact remains that the issue is the relationships between producers, processors, retailers and consumers. We need a supply chain that is fair at every level. I hoped that a voluntary code would achieve that, but at the moment, after appearing to work well, it is failing to do so. We need to look at it again. Is statutory imposition the answer? That has its drawbacks. Making the voluntary code statutory would limit its scope, but perhaps we have to think about that. I certainly agree that the groceries code adjudicator should be able to look at supply chain relationships, rather than simply the producer-to-retailer relationship; that would bring the dairy industry into its ambit.

What else can we do? First, the dairy industry needs to be ambitious. I do not like people saying, “Of course, we will be prey to all these imports.” We have a superb dairy industry and can beat off any competitors if we are sufficiently ambitious; but that means actively marketing dairy and dairy products, as we do, around the world. Anywhere I have been in the world, I have been able to find cheese from my constituency. We also need efficiency. There are marked differences in efficiency between dairy farmers, but it is no good shouting at those who are less efficient that they must invest, if they do not have the money to invest because they do not get a proper return on their product. We need to be able to support efficiency, and perhaps the Minister can give us his evaluation of the use of the £5 million dairy innovation fund, and tell us what more can be used.

The most important thing is for retailers, processors and producers to share the risk. Their relationship must be based on trust, and until that happens we will not have a sustainable dairy industry for the future.