Dairy Industry

Lord Herbert of South Downs Excerpts

Wednesday 4th February 2015 Westminster Hall

[Nick Herbert (Arundel and South Downs) (Con)]

I join other hon. Members in commending my hon. Friend the Member for Ribble Valley (Mr Evans) for initiating the debate and raising an issue of great concern to those of us with rural constituencies. In the past two decades or more, the number of dairy farmers in West Sussex has reduced significantly. The national trend is for further reductions, with the threat that dairy production in the county will become a very rare thing. That would be a great shame.

I want to raise three ways of addressing the unsustainable situation in which producers are paid a price below the cost of production—albeit that we accept that prices are volatile. The situation was not the same last year, and there are world market problems that cannot be addressed easily. The first issue, which was discussed by my hon. Friend and has been raised by the EFRA Committee, is the Groceries Code Adjudicator. I announced the Conservative party’s policy to introduce what we then called a supermarket ombudsman at the Oxford farming conference some five years ago.

I believed then, as I do now, that in spite of having faith in free markets, when markets operate in an unfair way, damage can be caused not just to producers but ultimately to consumers. That can justify measures to correct market failure. There is a danger that that is happening here and ultimately the consumers will lose if we undermine our production base too much. There is a case, as the EFRA Committee recommended, for strengthening the powers of the Groceries Code Adjudicator across the supply chain and ensuring that the adjudicator can levy substantial fines and mount proactive investigations. I welcome the Prime Minister’s indication that the Government will look at that and I hope that the Minister will say more about that when he responds.

The other policy that I promoted in opposition that we need to continue to press hard is country of origin labelling for our produce. That would help hugely in what is needed: a national campaign to market and promote British produce as the means by which consumers can support British production. We have not yet succeeded in extending that principle, partly because of the problems with getting EU agreement and also because of problems with our authorities who claim that such measures increase the burden of regulation. We need to resist such arguments.

I agree with my hon. Friend the Member for Montgomeryshire (Glyn Davies) that we should look carefully at public procurement and the way in which the public sector can do more to promote British produce. The long-term outlook for dairy farming may be rosy, given the potential for global markets to improve and for the international consumption of dairy products to increase, but we need to do more to help producers in the short term to recognise that dairy farmers are part of the backbone of the rural economy. It is not in the national interest to continue to see their loss.