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Dairy Industry

Volume 461: debated on Thursday 21 June 2007

8. What assessment he has made of the effect on domestic dairy farming of the growth in demand for dairy products in China. (144191)

The global dairy market is currently very positive, with demand outstripping supply and prices for all commodities at very high levels. That is beginning to be reflected in UK farm-gate prices, which are at their highest levels since 2004, with further increases expected. The UK dairy industry is actively investigating how it can benefit from the expansion of the Chinese market.

As the diet of people in China becomes increasingly westernised, is there not a great opportunity for UK dairy farmers to take advantage of that huge market? What steps are the Government taking actively to encourage British dairy farmers to access that market?

The hon. Gentleman is absolutely right. As I am sure that he knows, last year the International Dairy Federation held the world dairy congress in Shanghai. Since then, Jim Begg, president of the IDF and director general of Dairy UK, has made a number of trips to China to promote the UK dairy industry. The hon. Gentleman may recall that I said earlier that our room for manoeuvre in the commodities market is slightly more limited than that of our European competitors because of the volume of liquid milk we consume domestically, which leaves much less for value-added products. None the less, there are real opportunities in China if we can get niche and branded products on to the Chinese market, which is clearly responding positively to such products. The hon. Gentleman’s comments about the change in Chinese dietary traditions and practices are absolutely right—it is a great opportunity.