UK FARMERS UNIONS MEET TO TACKLE CRISIS IN DAIRY SECTOR

UK UNIONS MEET TO TACKLE CRISIS IN DAIRY SECTOR

Action points agreed at NFUS-hosted summit

NFU Scotland met with representatives from the rest of the UK’s farming unions to tackle the current crisis in the dairy sector.

The meeting was held on Monday, 1 December at Ingliston, near Edinburgh. Hosted by NFU Scotland, its dairy team was joined by representatives from NFU England and Wales, NFU Cymru, Ulster Farmers Union and staff from the Unions’ Brussels office.

There was recognition that while there may be no quick fix to the problems faced across the UK dairy industry, activity at a national, UK and European level can make a difference and drive stability and confidence.

Following yesterday’s meeting, it was agreed that at UK union level, work will be done to:
• Ensure any price cuts are proportionate, that when the market turns farmers quickly see the benefits;
• Encourage Europe and the UK to increase promotional activity to promote exports and generate import substitution;
• Re-assess the EU intervention price to ensure it is an effective safety net and not simply a crash mat;
• Develop financial management and insurance ‘tools’;
• Lobby for tax incentives to accommodate the volatile nature of farming; and,
• Where ever possible and sensible, efforts will be increased to work collaboratively together.

Gary Mitchell, NFU Scotland Milk Committee chairman who organised the meeting commented: “Although the markets continue to react to the global supply and demand imbalance, we will continue to ensure price cuts imposed on farmers are proportionate and properly explained by all milk purchasers. It remains imperative that the dairy supply chain shares the responsibility and consequence of weak markets and works to limit any long term damage to our dairy sector.

“The lack of transparency in the liquid sector needs to be addressed, as does the seemingly slow response of retailers to wholesale and farmgate cuts. While the retail price of cheese and butter on shop shelves has risen year on year, wholesale prices for these staple products have crashed by 30 to 40 percent. Growing retailer margins at a time of farmgate cuts is an issue the unions will challenge.

“The issue of volatile markets must be addressed and the European Union has tools at its disposal. The UK unions continue to lobby for Europe to take a more robust approach to supporting the sector. Specifically we are calling for the Commission to analyse and review the reference price set for intervention, which we believe needs an upward correction upwards to make it relevant.

“A robust EU approach merits UK Government support. While recognising the UK Government position on market support, these are exceptional times and we will be working at a Scottish and UK level to convince ministers that raising the dairy intervention threshold, currently set at an unrealistic and irrelevant level, is common-sense.

“The potential of Financial Risk Management tools being considered in Europe must be developed further and we will analyse and where appropriate encourage government and Commission to consider the ‘Margin Insurance’ scheme being introduced in America.

“Promotion of dairy products is also key. UK ministers must tackle a dairy balance of trade deficit of £1.357 billion. Of the 732,000 tonnes of cheese we use, 432,000 is imported. In terms of butter, of the 205,000 tonnes we eat, 105,000 tonnes is imported. The unions are committed to working together and with other stakeholders on promotional activity to increase our competitiveness in the UK and in the export market. EU promotional funds are available but the UK must get access to these.”

Speaking after the meeting, Ulster Farmers Union Milk Committee Chairman Jonathan Moore said:

“It was agreed that downward price pressure continues to be driven by commodity prices volatility and milk production succeeding demand, but there are actions to ease the situation at EU, national and regional level, including need for a collaborative and co-ordinated approach from the UK farming unions.

“Going forward the UK unions agreed that they would be pushing for UK Union Office Holders to meet senior UK ministers to discuss their concerns and this will be accompanied by a call for UK-wide Dairy summit to ensure a sustainable future for our sector.”

Ends