Farm minister Jim Paice has vowed to do everything in his power to put things right in the dairy industry after producers’ livelihoods were put at risk by swingeing milk price cuts.
Mr Paice told MPs he was prepared to “bang heads together” to get processors and the industry to find a way to agree on how to guarantee a future for the industry.
But he said the government was unable to intervene to make sure farmers got a fair price for milk, despite prices plummeting to their lowest retail level for seven years following cuts of up to 2p/litre by four major processors.
“I fully understand the anger expressed by many farmers,” Mr Paice said during DEFRA parliamentary questions on Thursday (5 July). “I am concerned, but ministers can’t set prices.”
Responding to claims the government should step in and regulate the industry to repair the “dysfunctional dairy supply chain”, Mr Paice said DEFRA would hold a consultation on a compulsory dairy package put forward by the European Union.
But he said he was keen for processors and the industry to avoid extra regulation by getting them to sign a voluntary code of practice in a bid to address the problems in the industry.
“I’m determined to do everything in the government’s power to put things right,” he added. “I have said I want to see a voluntary code and I’m more than prepared to bang heads together.”
Mr Paice said the biggest stumbling block in negotiations on a voluntary code of practice was around notice periods in contracts.
“The period a farmer can give to leave a contract and the period of notice a processors can give to a farmer are the points I’m encouraging both sides to find a compromise over,” he told MPs.
Processors also needed to target growing dairy markets in countries like China so they could do more to support British producers and avoid having to make price cuts, he added.
Mr Paice’s comments came after he agreed to hold an emergency dairy summit to discuss the cuts, which would slash as much as £50,000 off the average dairy farm income.
DEFRA and NFU officials are expected to meet as early as next week, while the NFU has also arranged to meet with buyers and processors in a bid to secure better prices.
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