Dairy Industry

Mary Glindon Excerpts

Thursday 13th September 2012 Westminster Hall

[Mrs Mary Glindon (North Tyneside) (Lab)]

It is an honour to serve under your chairmanship, Mr Walker.

I congratulate my hon. Friend the Member for Dunfermline and West Fife (Thomas Docherty) on securing this timely debate.

I speak not only as someone who has the honour of serving on the Select Committee on Environment, Food and Rural Affairs under the able chairmanship of the hon. Member for Thirsk and Malton (Miss McIntosh) but as someone who cares about fairness and the value that we as consumers should place on the items we buy to eat and drink.

My hon. Friends and I want a fair deal for both farmers and food manufacturers through a competitive and equitable supply chain for producers, processors and retailers alike. Hopefully, the voluntary dairy code, agreed between the previous Minister, the right hon. Member for South East Cambridgeshire (Mr Paice), to whom tribute has already been paid, Dairy UK and the National Farmers Union will positively address problems between members of the supply chain. The Government have described the code as a

“robust and proactive basis for a more effective system of raw milk contracts that will provide greater certainty and clarity for all parties.”—[Official Report, 4 September 2012; Vol. 549, c. 18WS.]

The question remains: is that voluntary approach enough? Should the Government strengthen the code with additional measures, including legislation? Will the Government consider Labour’s request for a strengthened regulator across the whole supply chain, including the dairy sector, to avoid the crisis we have seen affect dairy farmers during the past year?

Although DEFRA has engaged with the farming industry and retailers to develop the code, the Department of Health, in considering the future administration of the nursery milk scheme, is possibly putting at risk prices paid to farmers. Concerns have been raised with me by the School and Nursery Milk Alliance, a group of organisations, including from the dairy sector, committed to promoting the benefits to children’s health and well-being of drinking milk in schools and nurseries.

The Department of Health is considering four options, one of which would create a national contract for the supply and delivery of milk to all early years settings. That option would involve consortia taking part in a competitive tender for the direct supply and delivery of milk at an agreed price to all child care providers registered with the scheme. The Department of Health seems to favour that option, as it is the most cost-effective measure. The alliance, however, has serious concerns that that delivery system may have a detrimental effect on the dairy sector if the Department of Health uses the supermarket price as a benchmark for the provision of milk.

The alliance urges the Government to consider the impact of a national contract on the dairy supply chain, especially the potential pressure on farmers to reduce prices further. There are further concerns that a national contract may also reduce local purchasing, affecting retailers and dairies alike.

On behalf of the alliance, I ask the Minister to make the case to his colleagues in the Department of Health regarding the implications of the proposed changes to the administration of the nursery milk review for dairy farmers. It is good that DEFRA should work with the dairy industry and farming unions to ensure an equitable system of pricing, but that work must not be undermined by any other Departments looking to make savings in their budgets.

I said at the beginning of my speech that I was concerned about the value that we as consumers place on what we eat and drink. It is time we looked at the real cost of the items we all take for granted in our shopping baskets. Support for the dairy industry and other food producers should come from the Government and other bodies, but until the consumer fully understands the effort and dedication by our food producers that go into each pint of milk or unit of food, and voices that understanding to retailers and others, will a fair price ever be achieved for commodities, including milk and dairy products? In the meantime, I hope that the voluntary code is successfully implemented, but I urge the Government to prepare to legislate for the fairest system possible.