16/10/06
Calls for greater transparency throughout the dairy supply chain
were repeated by All Party Parliamentary Group for Dairy Farmers
chairman, Daniel Kawczynski when he met to discuss the sector’s
parlous state with Defra Secretary of State, David Miliband on
Wednesday, 11 October.
“While it is a straight forward process finding out dairy
farmer margins – a joint RABDF and NFU survey has just confirmed
producers are losing on average almost 4ppl; it is relatively simple
to do the same for processors, however it is virtually impossible
to determine retailer margins,” explained Mr Kawczynski.
“More than two years ago, an EFRA.com inquiry, Milk Pricing
in the UK, concluded that the dairy market was not operating properly
and despite its best efforts to determine who took what share of
the retail price of a litre of liquid milk, it was unable to account
for some 18ppl,” he said. “I am staggered to find that
in the meantime, no progress has been made. I reminded Mr Miliband
that the Dairy Supply Chain Forum chaired by farm minister, Lord
Rooker provides a real opportunity for influence and bring about
much needed change and also rationalization within the industry.
“That rationalization within the processing sector is desperately
needed, however we did agree the role and the remit of the OFT
was not well understood,” said Mr Kawczynski. “Lack
of understanding was frequently being used as a smoke screen to
avoid consolidation, when in fact company merger within other EU
states was much more relaxed, as was a fairer split in margin.” Other
countries had milk price regulated or at least indexed. For example,
France, Germany and Holland have partial indexation, while in Ireland,
the co-ops use contract formulae and \n independent price audit.
“We also brought him up to speed with the Irish Government’s
latest move to support its dairy processing sector with match funding
for €300m of European support. We indicated that this was
another prime example of a non level playing field and a lack of
common approach to the funding of a scheme designed to support
sustainability objectives.
“We believe that this massive injection of capital into the
Irish processing sector will seriously impact on our marketplace,
in particular pressure from imports of cheap Cheddar cheese.”
Tim Brigstocke, chairman of RABDF which delivers the APPG’s
secretariat commented: “David Miliband expressed a measure
of genuine concern for dairy producers and their future. We implored
on him the pivotal and essential role of farmers in maintaining
not only the landscape, but also a viable farming sector essential
to achieve his one planet farming ideology - farming that reflects
the need for us to live within the means of the planet, and farming
which helps us live within the needs of the planet.”
He added: “APPG for Dairy Farmers is now the largest APPG
within Parliament with more than 80 cross party MP members and
indeed the most active. We believe that this group of MPs has the
potential to bring about the much needed change in the industry.
We are fully aware of just how important Parliament is in creating
a legislative framework for a sustainable industry.”
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