Oral Answers to Questions

Liz McInnes Excerpts

Thursday 5th May 2016 Commons Chamber

[Cat Smith (Lancaster and Fleetwood) (Lab)]

5. What progress her Department has made on ensuring that farmers receive a fair price for milk.

[Liz McInnes (Heywood and Middleton) (Lab)]

8. What progress her Department has made on ensuring that farmers receive a fair price for milk.

[The Minister of State, Department for Environment, Food and Rural Affairs (George Eustice)]

These are undoubtedly very difficult times for many dairy farmers. The combination of oversupply around the world coupled with a weakening of demand in major markets such as China has led to a very depressed commodity price. We secured a £26 million support fund last November to alleviate short-term cash-flow pressure. We introduced a dairy supply chain code to improve dealings between dairy processors and farmers. Longer term, we are working on a project to introduce a dairy futures market to help farmers manage future risks. We are exploring the potential to facilitate investment in new dairy processing capacity, so that we can add value to our production.

[George Eustice]

We have introduced tax-averaging across five years to help farmers who face a tax bill; they can average it against difficult years. Her Majesty’s Revenue and Customs has been clear that it will take a generous approach to the time-to-pay provisions to help farmers who may be under pressure with their tax bill. I completely understand that this is an incredibly difficult time for many farmers. There is a mixed picture; a small number are still on aligned contracts, and still receive a fair price. We constantly meet retailers to try to improve the contracts that they offer, and to encourage them to offer more aligned contracts and to source more dairy production. Many of them are now offering those aligned contracts, or higher prices, to their farmer suppliers.

[Liz McInnes]

Can the Minister tell the House and Britain’s farmers why the Government failed to support EU efforts to improve the school milk scheme, which provides a valuable market for our struggling dairy farmers? Can he confirm that the Government will roll out the scheme in our schools, and say what benefit it will bring for British farmers?

[George Eustice]

It is not the case that we did not support the school milk scheme. The European school milk scheme is very small; it is worth around £4 million a year. It is dwarfed by our domestic schemes. The one funded by the Department for Education and the Department of Health, for infants, is around £60 million a year. The issue that we had with the school milk scheme was the bureaucracy and administration that the European Commission was trying to add to it. We were keen to pare that out, but we certainly supported the scheme; it is not true to say that we did not.

--- Later in debate ---

[Elizabeth Truss]

What we know is that no country that is not a full member of the EU has full access to the agricultural market. Whether it is Norway, Canada or any other of the countries whose models the out campaign have talked about, none of them has full access without quotas or tariffs. I have given the example of beef, with a cost of £240 million a year. The sheep industry would be even harder hit because 40% of all the sheep that we produce here in the UK are exported to the EU.

[Liz McInnes (Heywood and Middleton) (Lab)]

T1. If she will make a statement on her departmental responsibilities.

[The Secretary of State for Environment, Food and Rural Affairs (Elizabeth Truss)]

The Government are taking action to help farmers to manage low prices and market volatility, which is why we have ensured that all eligible farmers have now been paid their full basic payment or a bridging payment for 2015. To help farmers in the future, we have extended the period of tax-averaging from two to five years, and this month I am convening farmers, food producers and the European Investment Bank to seek further investment in improved productivity and processing capacity.

[Liz McInnes]

I thank the Secretary of State for her response. Can she confirm that any grant money from the EU solidarity fund will be additional money to be spent in the communities that have been affected by floods, and that it will not be swallowed up by the Treasury as payback for money already spent?

[Elizabeth Truss]

I can confirm that that is additional money that is being applied for through my colleague, the Secretary of State for Communities and Local Government.