Holstein Friesian calves in Scottish dairy©FLPA/Rex

Scotland must sell more home-grown cheese, butter, yoghurt and cream to make the crisis-hit industry succeed, politicians have urged.

A report by MSPs into the dairy crisis called on supermarkets to up their promotion of Scottish products in the face of foreign competition.

The Rural Affairs, Climate Change and Environment (RACCE) Committee said there was huge potential to add value to Scottish milk, with the current biggest butter and cheese brands coming from Denmark and England – not Scotland.

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In a letter to Scottish rural affairs secretary Richard Lochhead, committee convenor Rob Gibson said the industry’s focus had to be on the domestic market, as well as exports.

“The committee wants to see the industry working together in Scotland to improve sales of Scottish added-value dairy products,” he said.

“If such products are to be given a fighting chance in such a competitive marketplace then retailers need to assist as much as possible.”

The committee also said there must be more openness in deals between processors and supermarkets if trust was to be improved across the industry.

MSPs said they wanted a dairy sector where farmers were paid a fair price and shoppers could make informed decisions with full details about how food is sourced.

“Customers have a right to know how much the retailers they buy their dairy products from have paid to the producers of those products,” Mr Gibson said.

For their report, the RACCE committee took evidence in Edinburgh from the whole supply chain, from farmers to processors to supermarkets.

Their other recommendations included:

  • The Scottish government should provide advice and support for farmers if a futures market develops to protect producers from volatility
  • Allowing farmers to smooth profits over up to five years for tax purposes would help them build stronger balance sheets
  • The government should pursue proposals from the dairy voluntary code review, which included making sure the guidelines covered the whole sector
  • The EU’s intervention milk price is too low and should be reviewed before April
  • The benefits of setting up producer organisations, which could give farmers more clout in the marketplace, need to be fully explored.

The MSPs also had strong words for the co-op First Milk, a major Scottish processor whose low prices and delayed payments have put farmers under pressure.

Mr Gibson said the committee was “extremely concerned” at the situation and some of the management’s decisions up to this point should be criticised.

He recommended Mr Lochhead considered an eight-point plan of action areas about First Milk, including investment at the Campeltown creamery and partnerships with local authorities and agencies.