Minister dampens farmers’ hopes on milk cash

He spoke to the Yorkshire Post yesterday as a delegation from the north east of England lobbied MPs for support for the package put together by the European Commission, which is due for discussion by the European Parliament.

It includes a proposal to empower member states to insist on binding contracts between farmers and their buyers.

The National Farmers Union sees this as a useful step towards its solution to low pay for milk –contracts which tie local prices to the world average and not the local minimum. The NFU thinks Mr Paice could be more enthusiastic about it and its north east office, based in York, organised yesterday’s delegation to Westminster.

David Shaw, who produces Jersey milk from Elvington, near York, and chairs the North East Dairy Board, said: “We’ve brought 10 farmers with us – that represents the 10 going out of the industry every week in the UK. A price formula would make farmers and processors more equal and pay the farmers a market value rather 6p or 7p a litre below it.”

Mr Paice said he was not against encouraging contracts but most UK farmers already had contracts and the European proposals would not give him the power to insist on a price formula.

“Although we are not naturally in favour of more regulations, I am perfectly willing to consult with the industry on the final form of these proposals. But I do not want farmers to be disappointed and too many of them, along with the NFU, seem to be expecting more than they are likely to get out of all this.”

Mr Paice said he was against a proposal to amend competition law to allow organisations representing up to a third of a country’s milk production to pool their negotiating power but in the UK’s case, there was no prospect of any federation of that size anyway.

He thought the UK could do more to reclaim custom lost to imports – mainly in the form of cheese, milk powder and other processed forms of milk – and said he was working on proposals to put to the UK Dairy Supply Chain Forum. “There is a lot of forward thinking going on in the industry. Despite having lost half our dairy farmers, milk yield has hardly declined, because farms are getting bigger and cows are producing more. And with the possible exception of Ireland, we have the potential to produce the cheapest milk in the EU, because we have the best climate for grass.”