By FW staff

FUNDAMENTAL reform of the milk selling system, and allowing farmer-owned co-ops to continue processing, are critical if producers and dairy companies are to prosper, says the NFU in a report submitted to the ongoing MMC inquiry.

The union highlights the disproportionate share of UK processing capacity held by privately owned companies. This creates an “unstable” situation which leaves producers relying on dairy companies to pay fair prices for milk.

“This has resulted in members of Milk Marque receiving prices below the EU average,” says NFU president Ben Gill in the report.

To combat that, he insists that Milk Marque be allowed to process milk and says that in other EU states producer groups compete on more equal terms.

But Milk Marque must not be broken up in exchange for the right to process.

Resulting companies would be under-capitalised and less efficient. This would undermine their international competitiveness at a time when the industry must become more efficient.