department for Environment, Food and Rural Affairs

Debate between Helen Goodman and Mark Williams

Tuesday 17th July 2012 Commons Chamber

[Mr Williams]

My hon. Friend graphically illustrates the inconsistent role of some supermarkets. Along with the groceries code adjudicator, we need to look at how we can bring about fair contracts, to which everyone who has spoken has alluded, to stop the exploitation—an emotive word, yes, but that is the perception on the farms that I represent, as well as that of the National Farmers Union and the Farmers Union of Wales. The contracts that farmers are required to enter are simply unfair, as they are required to give 12 months’ notice or more to pull out of them whereas, as we have heard, processors can change the price they pay for milk at a few days’ notice, or quite literally overnight.

The Government are right to move towards a voluntary code. Like other Members, I look forward to an update from the Minister but I hope that if necessary, the Government will proceed with regulation. As Lord Plumb said in another place, rule books without referees generally have limitations. We all agree in the House that farmers deserve to receive the production cost for their milk, but Robert Wiseman Dairies has announced that from 1 August it will pay 24.73p per litre for milk. Arla Foods milk price will fall to 25p a litre, and the First Milk price to 24.35p a litre—5p less than the cost of production. Any situation in which farmers have to accept less than the cost of production is unsustainable. I commend Waitrose, Sainsbury’s, Tesco, and Marks and Spencer on the positive work that they have undertaken, but we need to ensure that those agreements are made across the board, from retailers to processors, with all major buyers of milk and dairy products agreeing to commit to a sustainable purchasing strategy.

[Helen Goodman]

Does the hon. Gentleman not agree that there is a problem with milk imports from countries with lower animal welfare standards and costs, and that those imports are not labelled in the UK?

[Mr Williams]

The hon. Lady served in the previous Parliament when, to be fair, the issue of labelling rose to prominence. It is critical, because it enables consumers to make informed decisions.

Given the feelings in the farming community about the recent price cuts, compounded by difficult weather conditions and rising input costs on-farm, the Government need to make it clear to processors and supermarkets that their failure to deliver fair prices may lead to severe disruption to the supply chain with dire implications not just to farmers but ultimately to us as consumers.

It is always worth remembering that the losses in the dairy sector will have a huge—I do not use that word lightly—impact on the broader rural economy. Welsh Assembly Government statistics indicate that, as my hon. Friend the Member for Brecon and Radnorshire (Roger Williams) said, the number of dairy farms has reduced by 800 over the five years from 2006 to 2011. The number of dairy farmers in Wales alone halved in the past 13 years. This figure will rise if we do not take action over the current price slash and unfair contractual obligations, because they will mean many job losses across the industry among suppliers.

Next week the Welsh farming community, in its widest sense, will gather for the Royal Welsh show in Builth Wells in the constituency of my hon. Friend the Member for Brecon and Radnorshire (Roger Williams). We will see there the breadth of the farming community. The supermarkets, the farming unions and the Young Farmers will be there, as will the machinery contractors, the feedstuff merchants and the farming families from Wales and beyond. I make this prediction: whatever the weather, the sheer number of people there will illustrate how important the industry is to rural Wales. The stakes are high.

It is election time in Ceredigion, when we have hustings with the farming unions—the FUW and the NFU. Before elections, I am always asked this question: “Would you encourage a young farmer, the son of a farming family, to go into the industry and continue with the family farm to earn a living and contribute to the broader rural community?” With hand on heart, if things do not improve and we do not have action, I would hesitate about whether I could say yes to that question.