Defra ministers talk a good game over food security, and the need to bolster UK farm and food production. Yet at the first critical test of their tenure those same ministers have been found wanting. As the dairy crisis loomed, ministers were asleep on the job.
Yet the warning signs could not have been clearer, when months ago some milk processors started to cut into their farm-gate prices for milk. Each processor’s actions may have been independent, but it certainly felt coordinated as processors followed each other with price cuts. Farmers who wanted to opt out of loss-making contracts found that their contracts would not allow it. Even if they could walk away, as price cuts were imposed upon them without negotiation they found many of the other major processors were following the downward spiral of price cuts. With nowhere to go, dairy farmers face ruin.
This crisis unfolded over many months, with plenty of warning signs for ministers. Farming unions repeatedly met government ministers to plead for help in the face of potential disaster for many milk producers. I wrote to ministers advocating specific action, including: the strengthening and enforcement of the voluntary dairy code; consideration of regulation if the voluntary code continued to fail farmers; allowing farmers to exit contracts in a reasonable timeframe when unilateral changes are made to contracts; beefing up the Grocery Code Adjudicator to make sure it could deal with these issues.
Yet it took a lobby of over 3,000 farmers from all over the country descending on London, blockades of milk processors, and campaigns by the Women’s Institute and celebrity chefs to shake ministers out of their lethargy. Farmers are rightly angry, asking why has it took until this week – only a week before three processors threatened another disastrous price cut – for ministers to gather milk-processors together and ‘bang heads together’ at the Royal Welsh Show.
Yesterday I visited the Royal Welsh Show, the largest agricultural show in Britain, to meet with Labour’s Welsh agricultural minister, Alun Davies AM, and farmers.
Farming minister Jim Paice has suggested the dairy supply chain might fall under the remit of the Groceries Code Adjudicator, yet last week the government whipped Conservative and Lib Dem peers in the House of Lords to vote against strengthening the powers of the adjudicator. Yesterday in the Lords, the government clearly ruled out new dairy code of practice falling under the remit of the adjudicator. Labour has been pressing hard for the Groceries Supply Code of Practice to apply not just to the supermarkets and their immediate suppliers, but right across the supply chain. Just as Ed Miliband has exposed vested interests in the media and banking, we need a fairness test between the big commercial interests and smaller producers in the food sector. The adjudicator could be an important sword of justice to ensure fairness for farmers and food producers but it risks being a toothless beast unless ministers are willing to listen to concerns. A race to the bottom in the supply chain is bad for farmers and, ultimately, bad for consumers.
Ministers seem terrified of taking on the supermarkets. Yet we know that until the last few weeks three main retailers – ASDA, Morrisons and the Co-op – were themselves guilty of putting downward pressure on the milk-supply chain by cutting prices to their processors, which were inevitably passed onto the farmers. While retailers and the British Retail Consortium were busy pointing an accusing finger at the milk-processors (and yes, Arla, Wiseman and Dairy Crest have to answer for their part in this), they were unwilling to shoulder any responsibility themselves. Not good enough.
Liquid milk is a staple food product, and as such is crucial to food security in the UK. Dairy farmers not only produce this staple part of our diet, but they are also rightly compensated to preserve the landscape and biodiversity which the people of this country hold dear. If we want UK-sourced milk of the highest quality, to excellent standards of health and of animal welfare, produced from a landscape and environment worth conserving, we must be willing to have a fair price paid across the whole supply chain, and that includes dairy farmers.
Labour wants to see fairness for farmers and affordable prices for consumers, and fair returns for processors and retailers. This can be achieved. We will work with the government where possible, but they will need to be open to the proposals which we and others are putting forward. The threat of regulation needs to be real, and will need to be imposed unless the voluntary code is made to work. The adjudicator needs to be given real teeth. And the government needs to wake itself from its complacency towards the countryside before it’s too late.
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Huw Irranca-Davies MP is Labour’s shadow farming minister
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