'As a former farmer I completely understand the need for fair commodity prices' - Neil Carmichael calls for action to help dairy farmers
WITH so many dairy farmers in the Valleys and Vale, I have been deeply involved in the ongoing efforts to respond to the recent reductions in the price of milk off the farm.
As a measure of the concern of farmers, more than 2,500 - more than a fifth of all milk producers - filled Central Hall in London at incredibly short notice to appeal for support.
Locally, I have been contacted by individual farmers and I have met a group of farmers in Eastington.
As a former farmer myself - although never a dairy farmer - I completely understand the need for fair commodity prices and recognise the vulnerability of farmers in a fluctuating market with relatively fixed production costs.
These points were made forcefully in Parliament last week.
According to an independent consultancy, the situation on an average sized diary farm is very serious with production costs rising, milk process low and getting lower, and, as with most businesses, cash flow problems being exacerbated by uncooperative banks. In real figures, an average diary farmer is about £3,600 worse off per month since April.
Action is being taken to alleviate the pressure on farmers.
Already, legislation is going through Parliament to establish a grocery code adjudicator, designed to ensure that large retailers act in a fair way through upholding the Groceries Supply Code of Practice.
The current spotlight on milk prices has already encouraged some supermarkets to review their prices and contracts but more needs to be done.
In the autumn, the Coalition Government will provide £5 million for special projects to the sector.
Farmers will have opportunities to prepare bids to strengthen their position in the market, now increasingly sophisticated and fully open.
Two other issues must be examined. First, strong and well resourced producer groups can play a vital role in rebalancing the relationship between producers and processors, leading to improved contractual terms and increased power in the market.
The structure of these groups will largely determine their capacity so I will be working to ensure they are fit for purpose.
Second, UK milk producers need a stronger punch in the international market and I will explore how this might be achieved.