department for Environment, Food and Rural Affairs

Debate between Helen Goodman and Roger Williams

Tuesday 17th July 2012 Commons Chamber

[Roger Williams (Brecon and Radnorshire) (LD)]

I, too, value the opportunity to bring the issue before the House. I attended the meeting of 3,500 farmers in the Methodist central hall. They were very angry and unhappy. The Minister handled the situation well, but it was a real demonstration of our dairy farmers’ frustration about their treatment.

At a time when British agriculture is doing relatively well, milk prices have fallen dramatically. A year ago, the average price of milk was about 35p a litre; now, it is less than 25p a litre and, as we have been told, the cost of milk production for the average farmer is about 30p a litre. When people have to sell below the cost of production, we will undoubtedly see farmers leave the industry.

In September 2002, there were 3,100 dairy farmers in Wales, but by May 2012 the number had fallen to 1,900. Across the whole of my constituency, there are fewer than 10 milk producers, which is a huge fall in numbers. There has been a downward trend in the production of milk. In 2003, 14.5 billion litres of milk were produced, but today the figure is around 13.5 billion. If those trends continue, the implications are bad not only for farmers but also for consumers. In the medium and long term, they are bad news for retailers and processors.

What can be done to avert a crisis? There is no single bullet, but we need action at every stage of the supply chain, from farmers, processors, retailers, consumers and the Government. As has been said, farmers need to work together. The voice of one farmer carries little weight in the marketplace, but when they join together, their negotiating power is much stronger.

Processors and retailers need to start paying a fair price for milk. Robert Wiseman Dairies, Arla Foods and Dairy Crest must scrap the scandalous price cuts they have imposed on farmers.

Consumers can reward retailers that are doing the right thing. Sainsbury’s, Tesco, Waitrose and Marks and Spencer have a price formula based on cost. I commend them for that. Consumers should show their appreciation by voting with their feet, and indeed their purses, and punish the Co-op, Asda and Morrisons, which do not have a similar scheme.

We need to start adding value to liquid milk. Our European friends are far better than we are at increasing profits from milk by processing it into cheese, yogurt and the like, which means it can be exported around the world.

[Helen Goodman (Bishop Auckland) (Lab)]

I agree with the hon. Gentleman. In my County Durham constituency, many milk producers are suffering. I also agree that milk producers need to sell to wider markets, but does he agree that is no excuse for the behaviour of the wholesalers and the supermarkets?

[Roger Williams]

The hon. Lady makes a fair point. People who are powerful in the marketplace, such as the processors, use their muscle to bear down on the prices paid to producers, who are suffering.

Finally, I turn to the Government. At the summit, the Minister said that a voluntary code between farmers and processors was close to agreement. Will he update the House on the latest progress?

I commend the Government on the Groceries Code Adjudicator Bill, which is making its way through the other place. Let us ensure that the legislation passes quickly, with the teeth it needs to do its job.

I welcome the work the Minister has already done on lightening the load of regulation on British farmers, but more can be done. I know he will continue to implement recommendations from the Macdonald report as and when he can.

The dairy industry is in crisis, but the crisis can be averted. Let us work together, so that our dairy industry will have a brighter future.