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Dairy Farmers

Volume 447: debated on Monday 12 June 2006

To ask the Secretary of State for Environment, Food and Rural Affairs what plans he has to help dairy farmers to cope with changes in milk prices. (74761)

Price negotiations are a private commercial matter in which Government cannot get involved, provided competition rules are respected. Milk prices are subject to change on a regular basis, and farmers understand that they fluctuate throughout the year as a result of supply and demand. However, the underlying price of milk is expected to fall as a result of CAP reform. Through the Dairy Premium, farmers were partially compensated for these price reductions.

The Government do recognise that the dairy industry is facing a number of challenges, not least because of farm-gate prices. Although the Dairy Supply Chain Forum does not discuss milk prices, it provides information to help the dairy industry make informed decisions about its future in a world with much freer trade and lower prices. It has also welcomed the moves in the industry towards more transparent milk contracts.