Dairy Industry

The hon. Lady says that it is the Opposition’s choice, but if she were to look at some Order Papers, she would see how many Adjournment debates are chosen by the Government—on some pretty weird and wonderful subjects. As has been said, the industry is in a parlous state, and I do not intend to rehearse all the points that have been made. As the hon. Member for Brecon and Radnorshire (Mr. Williams) said, the reduction in the number of farmers was initially compensated for by increased production by others, but overall production is now falling. Some people argue that that in itself will solve the problem, but I do not take that view. I do not believe that this is simply an issue of the oversupply of the marketplace. I want to concentrate on three specific issues in the hope that the Minister will respond to them, but before I do so, I want strongly to endorse the point made about the advertising of cheese. A ludicrous decision was made, and it does so much to damage the image of cheese as a wholesome food. There has been a lot of debate about the issue of regulation and intervention. The hon. Member for Westmorland and Lonsdale (Tim Farron) suggested that Adam Smith was wrong, but if he were to study Adam Smith, he would find that Adam Smith was right, because he said that a proper market operates only when there is a large number of both buyers and suppliers. That is what we do not have, so Adam Smith was right, but we do not have a proper market. We can all spend a lot of time looking back into history, but this Government’s decision, early in their days, to break up Milk Marque when it had only 37 or 38 per cent. of the market was absurd, particularly when one compares that with the share of the market held by a number of the retailers. There are now a number of major farmer-owned groups or co-operatives, call them what you will, which is good, but they are very small in comparison with the major retailers and particularly with the major processors, such as Arla and Dairy Crest. I share the concern about the Office of Fair Trading’s attitude. My proposition is that the dairy industry should be a European market. There has been a lot of comment about Europe, but the OFT judges competition in the domestic market, so whenever a milk group wants to acquire another cheese plant and so on, it is threatened with reference to the OFT, because it will have too big a market share. The OFT should understand that the dairy sector, particularly the processing sector, is a European-wide market, and it should look at market share throughout Europe. Reference has been made to Arla’s share of the Danish milk industry and to Frontera in New Zealand. Europe is supposed to be a single market, and competition rules should be based on that. My second point is the milk price. Making co-operatives more sustainable, and allowing them to integrate more and merge if necessary would go some way towards redressing the balance in the marketplace. Obviously, I welcome the Competition Commission’s investigation, and I strongly welcome its interim findings, which were published in January. It is a pity that its final report will be delayed, but I hope that it will be as robust as those findings. Supermarkets have clearly been making excessive margins, but I urge a word of caution to hon. Friends and colleagues who think that the solution is intervention and some sort of regulator. I am less enthused by that because we may end up with a belief that supermarkets make too much profit, so consumers should pay less, which would not help the dairy producer. Simply looking at the share of the retail price that the supermarkets take works both ways. It does not necessarily guarantee that it is passed on to the producer. It is more important to ensure that the market is working properly. As several hon. Members have said, fresh milk comprises only 50 per cent. of the market; the rest is made up of processed products, the major part of which is imported. That is where we should seek to make a real difference. The latest figures show that, in 2006, we imported 352,000 tonnes of cheese, 154,000 tonnes of yoghurt, and so on. Those are huge amounts, and are partly an inheritance from the Milk Marketing Board which, for all the good points that some people claim for it, prevented innovation and investment in processing during the years of its existence, when the big co-operatives in Europe were so investing. That is why they now have the volume of scale and have penetrated our domestic retail market with processed products, yoghurts, ice creams and so on, yet they are paying their milk producers the same, if not more, for their raw milk as our milk producers receive. If the supermarkets really care, as they profess to, about the future of our dairy industry and the need to retain a British dairy industry, they should work with the major processors to develop our own domestic lines of processed products—the high-value desserts, yoghurts, ice creams and cheeses that we import instead of, as the hon. Member for Brecon and Radnorshire said, the low-value, mild, bog-standard Cheddar. The final issue that I want to raise will not be a surprise to the Minister. We have been trying for some time to have a debate in this Chamber on tuberculosis, but to no avail. He knows that I and other hon. Members have a real complaint about the Government’s lack of concerted effort. If he is honest, I suspect that he would accept in private that the issue is serious and that more can be done. Over the past 10 years, we have seen a piecemeal approach to dealing with TB. Recently, there has been a small but welcome increase in the use of gamma interferon and the introduction of pre-movement testing at considerable cost to the farming industry, but without the commensurate actions that the industry believed were part of the deal in accepting pre-movement testing. We have had the Krebs report and the triplets trials, and we are now awaiting Professor Bourne’s final conclusions. We need a comprehensive, all-enveloping strategy, and to roll out the gamma interferon test across the board to ensure that the skin test, which is pretty crude, is as accurate as possible. We must increase the frequency of testing, particularly in the frontier areas where the disease is spreading. I am sorry that the hon. Member for Bishop Auckland (Helen Goodman) has left. It is all very well for her to say that, from Durham’s perspective, we are all wrong about TB, but she has no significant problem with it in the Durham area. We must, of course, continue with research into badger and cattle vaccines, and I hope that the Minister will tell us where we are with that. We are told that they are getting closer. I also think we need much more research into mineral deficiencies as a precursor to TB infection. It has been argued that selenium deficiency in particular makes cattle more prone to TB. Biosecurity is obviously important, and the Minister will not be surprised to hear me say that we must do a lot more on the polymerase chain reaction test. I am concerned that the Government are not addressing the matter as urgently as they should. I know that they have commenced a three-year study programme with Warwick university, which has done much of the work, but last year DEFRA was presented with a proposal, which included the central veterinary laboratory, the Veterinary Laboratories Agency, University college London and a private company, to develop a specific real-time PCR test for the detection and quantification of mycobacterium bovis in the environment—that is exactly what the Opposition have been calling for—to detect whether badgers and badger families in their sets are carrying the infection. I do not believe that culling badgers is a silver bullet to solving the problems of TB, and I reject the argument that that is the sole solution, but as Professor Bourne has told me publicly, unless we get rid of the reservoir in wildlife, we will never get rid of bovine TB. It is part, but only part, of the overall package of necessary measures. It is more than a year since the Government’s consultation closed, and we need a decision. Even a negative decision would be of some reassurance that the Government were addressing the issue rather than, as it seems, trying to keep it in the long grass. Those are three specific areas in which the Government could take a leading role to address what all hon. Members who have spoken agree is a very serious crisis in the industry.