Dairy Farming

Thank you, Dr. McCrea. I will try to be brief. Much has already been said about the plight of dairy farmers. Indeed, in my own constituency, I think that we are down to fewer than 10 dairy farmers at the moment and that is in the biggest agricultural constituency in England and Wales. So we have suffered. However, one of the remaining herds in my constituency has 350 cows, showing the way that the industry has gone. With all the farmers who have gone out of the industry, we are left with a small number of farmers, but they must be the most efficient farmers in the whole farming industry. Even so, they are struggling to survive with these milk prices. Therefore, we get some idea of the consequences of low commodity prices. However, we should not be surprised about these difficulties. The point that I will make, which I do not think has been made by any other hon. Member, is that when we went into the single farm payment scheme it was on the basis that we would be competing not only within Europe but within the world on a commodity basis. The single farm payment was there to compensate farmers for a drop in commodity prices. Not much liquid milk is traded, but huge amounts of dairy products, including generic cheddar cheese, is traded throughout the world. That has been the problem that has pulled down milk prices in Britain. We should consider the fact that milk production in Britain has only fallen from 13 billion litres to 12 billion litres, despite the number of people who have gone out of the dairy industry. Of course, the reason that commodity prices have fallen is that we are doing away with intervention buying, which kept up prices within the European Union, we are doing away with import tariffs, which discouraged cheaper imports from being brought into the country, and we are doing away with export subsidies, which allowed surplus product in this country to be exported and dumped on the world market. So it is not surprising, in a way, that we have got lower commodity prices. Many important issues have been raised, such as the ombudsman, TB and various other issues. However, the really important question is this: what will the common agricultural policy look like in 2013? I do not think that anyone has really addressed that issue. We know what the CAP should look like; it should give a commercial return to farmers and a guaranteed supply of products at reasonable prices to consumers. However, what does it look like in detail and in principle? The National Farmers Union has given us some indication. It has said that the future CAP, with regard to milk and other products, should be:""a simple policy…market-oriented…geared towards competitiveness"." The final indication of what the CAP should look like—but not what it will actually be like—is that the NFU says it should be:""fundamentally a common and an agricultural policy, predicated on a firm belief that the above aims are best achieved through a common policy framework with EU rather than national funding."" The NFU recommends no co-financing or co-funding but a straightforward common agricultural policy. In the last 30 seconds available to me, I must say that the experience of the dairy industry, and indeed of some of the arable sector at the moment, is that with great dips in commodity prices, the farming community and industry still needs direct payments. Yes, some payments are pillar 2 and fund public goods, but if we are to have a vibrant agricultural industry in this country, direct payments such as the single farm payment will be necessary if we are to survive in a cut-throat global competition for commodities.