4 December 1998

Milk industry lags behind the world

By Jessica Buss

UK MILK producers are failing to benefit from their strengths of milk quality testing, quality assurance and cattle traceability in promoting their product in the growing world market, warned John Sumner, Royal Association of Dairy Farmers policy adviser.

Speaking at a farmers weekly Farmer Forum at Smithfield, Mr Sumner saidthe EUand UKwould miss out on many opportunities in the world milk market.

"We need quick changes to the quota system to allow EU producers to compete in the world market. Even then UK producers would still not be able to share in that market because we have a fragmented industry with no leadership. UK farmer returns are declining while in the rest of Europe they are increasing." he warned.

How can UK producers share in the world market if they dont promote their product? asked Mr Sumner. Before deregulation of milk marketing, the UK spent £25m a year promoting milk compared with only £2-3m at present.

"I question the MDC report on generic advertising. The projected benefits may not come back to milk producers in the current milk marketing process.

"We must improve the structure of milk marketing. There are five main supermarkets, five main buyers and 40 milk selling groups," said Mr Sumner.

Bill Madders, milk producer and chairman of the COPA/COGECA milk group in Europe said that to have a real impact in the future, producers must co-operate in processing.

In the UK, 90% of milk is processed by non-farmer owned businesses. In other European countries, 70% of milk is processed by farmer-owned co-ops.

Working towards bringing UK milk selling groups together should help increase farmer-owned processing, added Mr Sumner. "Many non-quota holding groups sell only to one buyer. Producers must be in large enough groups to be able to say No to a buyer and look for other business.

"Milk producers must take the lead and begin to co-operate. They must not wait for a visible dividend before co-operating," he concluded.