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Dairy Industry

Volume 498: debated on Thursday 29 October 2009

We closely monitor the economic prospects of the sector, with an extensive review made on a six-monthly basis. I am also chairing the twice-yearly meeting of the Dairy Supply Chain Forum on 1 December. The forum regularly brings together all the key players in the dairy sector and has been doing so for several years.

The Minister will know that the UK dairy industry accounts for around 18 per cent. of UK agricultural production by value, is the single largest agricultural sector and is worth £3.5 billion. It is essential to this country, and to my constituency. What assessment has he made of the European Union’s proposal to set up a fund for dairy producers, aimed at assisting farmers under pressure from unacceptably low and unfair prices?

Only last week at the Agriculture Council, we raised our serious concerns about the fund that has been set up, which I am sure would meet the hon. Gentleman’s concerns as well. We have been asking questions, and I also gave evidence on this item yesterday to the Environment, Food and Rural Affairs Select Committee, chaired by the right hon. Member for Fylde (Mr. Jack). It is not clear how the €280 million is going to be separated and broken down, or what the criteria are for claiming it. We have concerns about that and we are monitoring the situation closely at ministerial and official level.

One of the problems with milk is that the supermarkets often sell it below cost price, which puts huge pressure on the producers. Will the Minister press his colleagues at the Department for Business, Innovation and Skills to look into this as part of the remit of an ombudsman, if they come forward with such a proposal?

The Dairy Supply Chain Forum regularly looks at these issues, providing an opportunity for all sides of the dairy sector to come together. These matters are discussed there. The Competition Commission’s recommendations are being discussed between Government Departments, and I know that this is a key aspect of those discussions. We will be announcing our conclusions in due course.