Dairy Industry

Nigel Evans Excerpts

Wednesday 4th February 2015 Westminster Hall

[Mr Nigel Evans (Ribble Valley) (Con)]

I am grateful for the opportunity to lead this debate on the dairy industry under your chairmanship, Sir Roger.

This is a time of deep uncertainty for many farmers, as they have seen huge volatility in the price that they receive for milk over the past three years. The dairy industry is vital for the United Kingdom, but I hope hon. Members will excuse me if I address the challenges facing the industry through the prism of my rural constituency, Ribble Valley. The industry is simply the backbone of the constituency. Some of the farmers to whom I spoke can trace their farms back several hundred years. Generations have worked the land and shaped its appearance and character.

From a food security point of view, the industry is simply essential. Its liquid market is strong; of course, we also have some of the most recognised cheeses in the world, particularly the tasty, crumbly, creamy and mature Lancashire cheeses that are made by some of the most famous family names and sold throughout the world. Milk is also processed into other commodities, including yoghurts, butter and powdered milk.

The by-product of the industry is amazing: rolling countryside that attracts a large number of tourists, providing income for bed and breakfasts, amazing hotels and companies that source food and beers, as well as providing a large number of local jobs. Then there are the gastro pubs. There are far too many to mention, but we have the Campaign for Real Ale pub of the year, the Swan with Two Necks in Pendleton, and, just 2 miles away from there, the food pub of the year, the Freemasons at Wiswell. Originally I had planned to mention all the pubs, delicatessens, restaurants and amazing quality shops in my constituency, but my speech became a travelogue for Ribble Valley; that is what the dairy industry has done for my area. The Ribble Valley food trail is now firmly a part of why visitors come to the area, and those visitors keep small villages such as Rimington, Clitheroe, Longridge, Lostock Hall, Chipping, Waddington and Mitton alive.

The recent investment in local businesses runs to millions of pounds. The restaurants and hotels in the James’s Places group are found throughout the valley, representing big investments in the area. The Aspinall Arms in Mitton has just seen massive investment, as have the White Bull in Gisburn, which has reopened after being closed for over a year, and the Derby Arms in Longridge. My point is that without the backbone of the dairy industry the whole fabric of the area simply would not exist.

Anyone can see the pride and worth of the industry as they travel through the area, but it is especially clear at the agricultural shows, such as the Chipping show, the Hodder Valley show and the Longridge show. I am proud to say that the Royal Lancashire show will be part of the local calendar once again this year, on 7, 8 and 9 August. [Interruption.] My hon. Friend the Member for Stone (Sir William Cash) has just pushed a note to me saying, “Don’t forget to mention the Shireburn Arms”—that is just down from Stonyhurst college, where he went to school.

My village of Pendleton is relatively small. It has three dairy farms of different sizes. John Cowperthwaite is the seventh generation of his family to operate from his farm. He has a contract with Sainsbury’s and says that the contract has been honoured and that he is happy with the way he is being treated. That means that there will be a business for his son Richard, who is 22 years of age, to take over. Richard works with his dad at the moment.

[Heather Wheeler (South Derbyshire) (Con)]

I congratulate my hon. Friend on securing this important debate. It is a pleasure to serve under your chairmanship, Sir Roger. My hon. Friend is getting to an important question about contracts for our farmers. Sainsbury’s has been very good, as has Tesco, but the real issue is the pressure on the price per litre. Will he go on to talk about the big supermarkets’ contracts?

[Mr Evans]

Yes. It will not have gone unnoticed by my hon. Friend and others that Sainsbury’s took out a large advert in a number of newspapers indicating those supermarkets that are being fair and those that are not. I will refer to that later.

Edward Cowperthwaite’s farm is a bit further into the village. He milks a smaller herd than John Cowperthwaite. He came off his tractor to speak to me yesterday. He is not on a contract and has seen two successive cuts to his milk price, in January and February this year. He works seven days a week and cannot afford to employ anyone. He has some sheep to keep his income up, and his wife works as a teacher, so thankfully he can make a go of it, but he has five youngsters and is not sure that any of them will want to enter farming while it is in this particular predicament.

At the top of the village is William Slinger’s farm, which he can trace back to 1603. He has a larger herd of cows, plus sheep, and is the founding director of Bowland Fresh, which about 30 local farms feed into. Both Booths and Asda take his milk, and he works hard to ensure the scheme works for the participating farmers. I want to thank Booths in particular, as the founding buyer for Bowland Fresh, for the considerate way that it has treated local suppliers. Edwin Booth lives locally and knows that the value of milk is not simply the plastic bottle people take away from his stores. I also thank Asda for its support for Bowland Fresh.

Whether the cause is Russian sanctions, the reduced Chinese market or simply an over-supply in the market after a very good year last year, the fact is that the price for milk on some farms is now way below the cost of production. A local dairy farmer from Samlesbury, Graham Young, who is also a member of the National Farmers Union north-west dairy board, told me that many farmers joined the European milk co-operative, Arla, and are getting under 25p a litre; some farmers are in the First Milk co-operative and are getting around 20p a litre. Although the longer term is looking good, those prices are not sustainable in the short term, and farmers have to survive the short term first.

The current situation has energised a number of MPs who, like me, think something must be done. Those include my hon. Friend the Member for Thirsk and Malton (Miss McIntosh), who is here today. She is Chair of the Environment, Food and Rural Affairs Committee, which produced an excellent report last month making a number of important recommendations. My hon. Friend the Member for Carmarthen West and South Pembrokeshire (Simon Hart), who is also here, had an Adjournment debate in November on this issue; sadly, the plight of the industry has worsened since then. A number of Members have put down or signed early-day motions and raised issues relating to dairying on the Floor of the House, including my hon. Friend the Member for Stone.

[Sir William Cash (Stone) (Con)]

Non-payment caused a huge crisis. Will my hon. Friend give some thought to the idea that the Government could help by engaging more, through public procurement of services? People who are in the Army, the education sector and other sectors could get milk supplied in a way that would help our farmers, and would ensure that the Government were taking an active part on this issue.

[Mr Evans]

That is an excellent idea, and I hope that the Minister will be able to respond to it, given the Government’s ability to direct procurement towards British dairy farmers.

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

My hon. Friend talks about all the activity taking place in this Parliament, but we also had many Westminster Hall debates in the previous Parliament about the crisis in the dairy industry. Does he agree that the time for talk is now over, and that we really are looking to the Government for concrete steps this time round to sort out this perennial problem?

[Mr Evans]

I do agree that the time for action is now. If we do not act now, it will be too late. The number of farms has dropped from 35,000 to fewer than 10,000, so this is clearly a crisis. I should congratulate my hon. Friend on being the founding member of the all-party group on dairy, which has focused on the industry’s plight.

To go back to a previous intervention, we know something is out of kilter when milk is sold at 89p for 4 pints. When I was in Ribble Valley last week, I saw 8 pints on offer for £2 in my local Co-op. Perrier sells for £1.04 a bottle—water is valued more than milk. That cannot be right.

I commend the Minister on his hard work and resolute efforts to look at fresh ways of supporting the industry. He meets industry representatives constantly; indeed, he met Thomas Binns, one of my dairy farmers in Cumbria, just yesterday. I have looked long and hard at a number of suggestions made by some of my farmers. I have also read around the issue in the Farmers Guardian, and I have read reports about the industry’s plight. I have produced a charter for the British dairy industry, which I hope the Government will get behind. It is a 12-point plan, although it may well be a 13-point plan after the intervention by my hon. Friend the Member for Stone. I have provided the Minister with a copy. The charter simply says:

“1. The Groceries Code Adjudicator to be given more powers to protect dairy farmers.

2. A strengthened Groceries Supply Code of Practice.

3. Supermarkets and wholesalers who pay less than the cost of production for milk should be named and shamed. They have Fairtrade coffee, chocolate and bananas, this should extend to Fairtrade UK milk and dairy processed products.

4. Farmers need to be given more assistance in accessing a variety of export markets.

5. Banks should provide support to dairy farmers during this challenging time for the industry.

6. HM Revenue & Customs should move to look at profits over a five year period to provide a more level rate of taxation.

7. The EU intervention price of 15 pence per litre needs to be urgently reviewed as it is no longer an accurate figure and is far too low.

8. Better and clearer origin of production labelling. British means produced and processed in the UK.

9. More stability on investment allowances for farmers.

10. Ensure that dairy farming is supported and championed by the Government. Dairy farms are the backbone of rural Britain and it must be sufficiently attractive for new generations of young farmers to enter the industry.

11. Look to encourage producer organisations within the industry to give better protection on product price.

12. Look to cushion the worst impacts of the volatility within the industry.”

Let me also add point 13, on the public procurement of UK milk.

[Richard Drax (South Dorset) (Con)]

I congratulate my hon. Friend on his fantastic speech, which is very timely. May I add my concerns about over-production? With quota coming off this year, we hear that Ireland is likely dramatically to increase its production of liquid milk. That will flood across into the United Kingdom, and the consequences could be very serious. I would be interested to hear what the Minister has to say about that. Does my hon. Friend share my concerns about the future of milk production?

[Mr Evans]

That has certainly been heralded in a number of agricultural publications. Ireland, France, Germany and the Netherlands could all increase their production, and the price would drop even further. The threat is that we start importing more product into the UK, which will further and severely disadvantage British dairy farming. I hope the Minister will address that.

[Simon Hart (Carmarthen West and South Pembrokeshire) (Con)]

At Prime Minister’s questions the other day, did the Prime Minister not say in answer to a question from my hon. Friend the Member for Montgomeryshire (Glyn Davies) that the Government were seriously looking at, and he was committed to, the introduction of fines and the spreading of tax payments over this year? If that is good enough for the Prime Minister, I hope it will be good enough for the Minister when he responds.

[Mr Evans]

I will finish now to give lots of other Members an opportunity to contribute. However, we will all listen carefully, as will the industry, to what the Minister has to say. We know he supports the British dairy industry, and we know the Prime Minister supports it, having a number of dairy farmers in his constituency. It will be interesting to hear what the Minister has to say. I would like to thank Kathleen Calvert, a stalwart defender of the industry’s interests, whom I spoke to this morning, for her suggestions on helping the industry, some of which I have incorporated into my speech.

I want to finish with the last paragraph of a letter to Emma Penny, the editor of the Farmers Guardian, which is published not far from my constituency, in Fulwood, on the outskirts of rural Lancashire:

“If nothing is done we will not recognise the industry in 10 years’ time. It will consist of 50 mega dairies on the outskirts of large cities and even more milk, cheese, butter and powder will be imported. Wake up Britain.”

Minister, it is time we all woke up and smelled the coffee, but what is the use of smelling the coffee unless it has British milk in it? We also want some toast with British butter on it and a slab of Lancashire cheese, followed by British yoghurt and the full English breakfast, including a healthy portion of black pudding—all supplied by British farmers. We must not take the industry for granted. We must not lose it. We have to act now to ensure its future.

[Several hon. Members]

rose—