I pay tribute to my hon. Friend the Member for Ribble Valley (Mr Evans). Dairy farming is integral and vital to the economy, culture and landscape of Cumbria. Across the UK, over the past four Parliaments, we have seen a more than 50% drop in the number of dairy farm holdings and a more than 10% reduction in milk-producing capacity because of the lopsided, counter-productive, unfair and unfree market.
It is an outrage and a great shame that it has taken this crisis to prove right those of us who wanted the groceries code adjudicator to have more powers and more teeth. We should have got it right at the beginning, but the power to fine is right. As my hon. Friend the Member for Argyll and Bute (Mr Reid) rightly said, we should ensure that the adjudicator can look beyond the direct relationship with supermarkets to the indirect relationships, because that is where farmers are being done over most regularly and most heinously. We must look at the processor monopoly within the market, too, and consider putting the code of practice on a statutory footing.
I challenge the notion abroad that, somehow, the supermarkets are using milk as a loss-leader, which is not the case. Nearly 50% of the average price of a litre of milk in the supermarket goes into the supermarket’s pocket. There is room within the supermarkets’ profit margins to deal with this situation, and we must not let them hide behind the idea that this is all about world commodity markets when it is not. Poverty and hardship is now rife among dairy farmers. The inability of dairy farmers to reinvest in their future and their stock is now commonplace, and we see the loss of family farms on at least a daily basis.
John Maynard Keynes once said:
“Markets can remain irrational longer than you can remain solvent.”
That is absolutely the case within the farming and dairy sectors, and we must recognise that we have to save the supermarkets from themselves before they completely lose the producers on whom they rely. It is an outrage and an irony that we can go down a supermarket aisle to buy fair-trade coffee and tea from Nicaragua and Colombia, but down the next aisle, getting the milk to put in that tea and coffee, we find milk ripped from the hands of a Cumbrian dairy farmer for less than it cost them to produce. We are passionate about fair trade for farmers from Colombia, but equally passionate about fair trade for farmers from Cumbria.
10.32 am