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New plans for dairy farmers to form producer groups

By Western Morning News  |  Posted: December 12, 2012

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Farming Minister and Somerton and Frome MP David Heath on why producer organisations will help the crisis-hit dairy industry.

English dairy farmers will be able to form producer organisations to have more clout when selling their milk, under plans set out by the Government yesterday.

The proposals follow a difficult year for dairy farmers who in the summer fought against moves by the major processors to further cut the price they paid for milk.

The threat of price cuts, along with rising feed costs, raised fears that many dairy farmers would be forced out of business.

Under the plans published for consultation, English farmers would be able to come together and form producer organisations, rather than negotiating with major processors as individuals.

The producer organisations, which are widespread in Europe, could cover up to a third of UK production and negotiate on behalf of their members, the Environment Department (Defra) said.

An industry agreement on a voluntary code of practice on contracts between farmers and processors has already been agreed.

Farming Minister David Heath said: "England's dairy industry is world-leading, yet still has so much potential to expand, and I'm convinced that better industry collaboration is the key.

"We've already got the industry code of practice, and negotiating as groups rather than individuals will give dairy farmers an even louder voice to get their just rewards from the market place."

He also announced that farmers in the sector will also be able to apply for a share of £5 million of grants to set up producer groups and co-operatives and invest in new technology to help them improve their businesses.

Defra said the UK currently imports £1.2 billion more dairy produce than it exports, with a huge potential for growth in domestic and export sales.

A summer of discontent saw farmers reduced to picketing large dairies, including Robert Wiseman in Bridgwater, Somerset, after threats that payments for their milk would be slashed. Many critics blame supermarkets for selling milk at rock-bottom prices as a "loss leader" for the crisis in the dairy farming industry.

Mr Heath made the announcement while on the Isle of Wight where he visited a dairy group that set up an innovative farm co-operative.

The co-operative, which is the first of its kind in the country, brings together 17 of the island's dairy farmers to produce and market Isle of Wight branded milk to around 30 retailers across the Isle of Wight, including supermarkets and local shops.

Writing in today's Western Morning News, Mr Heath, Liberal Democrat MP for Somerton and Frome, said the summer's wave of protests were a "watershed moment".

He said: "It is not unknown for farmers in some of our continental neighbours to take to the streets or use tractors to blockade our roads.

"It is less common in this country, but that stereotype was shaken-up this summer, when the Westcountry's green and peaceful countryside was filled with images of anger and desperation."

Urging dairy farmers to export more, he goes on: "The dairy industry's got a bright future and now I want producers to come forward and grab the opportunities with both hands. There's a whole world out there for the British dairy industry to conquer."

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