It is a great pleasure to take part in the debate. I should perhaps declare an interest, in that I am still involved in farming—though not in dairy farming for the last 50 years, and even then not on a scale that would have caused any over-production.
I thank the hon. Member for Dunfermline and West Fife (Thomas Docherty) and all the other members of the EFRA Committee for their contributions today and their work on this matter. I look back fondly at the time that I spent on that Committee, but if I remember correctly, we were also doing then the work that is being done at the moment.
I welcome the Minister to his place; as an MP, he has always had an interest in agricultural matters, and he comes from Somerset, which is right at the heart of the west country milk-producing region.
I pay tribute to the previous Minister, the right hon. Member for South East Cambridgeshire (Mr Paice), who has now moved away from his post. He had a long apprenticeship in Opposition and perhaps too short a time in power. He delivered for British agriculture and I know that farmers think the world of him. I was at the Methodist central hall meeting, which was probably
one of angriest farmers meetings I have ever attended. I am a veteran of farmers’ demonstrations, but that one was exceptional. On that occasion, the right hon. Gentleman handled it very well. Only so much can be done at a political level, but politicians can work with the industry to change public perception and public opinion on such matters, which has certainly happened.
It was a year of unrest for those in the dairy sector. They are feeling the effects of the increase in the cost of inputs—fuel, fertiliser and other oil-based products—but unlike other agricultural sectors, such as red meat and cereals, they have seen the price of their commodity decreasing, whereas other sectors have seen some compensation in the form of increasing prices.
In terms of price, the supermarket industry looks on milk as one of those staple foods that consumers judge supermarkets on, and as such, it has always been the focus of price wars. Even this morning in Tesco, eight pints were still selling for £2. In some ways, I do not criticise the supermarkets selling the milk—they can sell it for what they want—but they should not penalise farmers in their competition with other supermarkets. We have very high animal welfare standards. The public demand it. If that is to continue, farmers have to get a decent price.
Naming and shaming has made a difference—some of the processors have certainly increased their prices. The former Minister told us in July that the voluntary code of practice was coming and was only “days away,” and I am pleased to say that it was announced at the Royal Welsh show. It was a great fillip to not only Welsh, but UK dairy producers. I have looked at the voluntary code:
“It offers a number of benefits and protection to farmers, including: 30 days’ notice of cut to a farmer’s price or other significant change to contractual terms”.
When we compare that with the investment that farmers have made in their farms and milk producing businesses, what are we talking about? Thirty days. Farmers have invested for years and years, and the profitability of their business can be changed just like that. I welcome the voluntary code—it is a good start—but both the milk-processing sector and the supermarkets need to be committed to the total food chain. If people are going to invest in and produce milk and other products of the quality that they have produced in the past, they need confidence that the milk chain will be there and will give them a fair return.
Certain milk processers have told me that a reason for the reduction in milk prices was that the wholesale price of cream dropped from £1,800 a tonne to £1,200 a tonne. The last time I went to buy skimmed milk, they charged the same for the skimmed as they did for the full-cream. Some of the arguments that the milk processing companies have presented should be looked at again.
The milk industry has been the basis of British farming. We need to ensure that the supply chain is made firm and secure, so that people can continue to invest in it and consumers can benefit from it.
4.35 pm