Tag Archives: Groceries Code Adjudicator

No fair trade here: cream and butter prices rise but farm-gate prices for milk don’t

The Financial Times reports that a reduction in the milk supply, due to a cold spring and dairy farmers leaving, has led to prices of butter and cream rising 18.7% in the year, according to data from the Office for National Statistics. But despite “record prices” for wholesale cream and butter in recent weeks, the National Farmers Union point out farm-gate prices for milk have continued to fail to keep in step.

BBC online reports that Arla’s CEO Peter Tuborgh said producers “put the brakes on” in 2016, in the wake of previous overproduction of milk and consequently lower prices and Michael Oakes, chairman of the National Farmers Union dairy board, added that UK supply had fallen partly because so many farmers “decided enough was enough during that downturn”. Many farmers have often had to sell milk for less than the cost of producing it and so – understandably – the number of UK dairy producers has fallen.

The National Farmers’ Union said the “constant boom-and-bust dairy market cycle” helped “no-one, most of all farmers” and expressed concern about the lack of strong upward movement in the farm-gate milk price.

Milk buyers are worried about milk volumes falling but, the NFU spokesperson added, “Confidence within dairy farming is at an all-time low [due to] mistrust in the market dynamics and suspicion about how milk buyers are treating their supply base, coupled with the lack of direction on the impact of Brexit on the dairy sector.”

Post-Brexit, will the UK government ensure that ‘ordinary’ farmers receive a fairer proportion of the agricultural payments and turn away from the practice of subsidising offshore companies and rich individuals?

And will the Groceries Code Adjudicator, who places great emphasis on scrutinising supermarkets give more time to food producers and address the issue of unjust farmgate prices?

 

 

 

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Labour MEPs call for action to ensure UK dairy farmers get a fair deal

jude and paul mep farrnersIn February, Labour MEPs called for the EU, UK government and consumers to act to ensure North East farmers get a fair deal.

The price of milk in UK supermarkets has fallen to levels which are unsustainable for UK dairy farmers, with prices dropping from £1.39 to just 89p. See DEFRA’s Forecasts of Farm Business Income by type of farm in England – 2014/15.

The NFU suggests that this is leading farmers to leave the industry with around 60 having left in December alone. Milk in supermarkets in the UK can now be cheaper than water and the price can be below the cost of production. In response MPs have called for an EU-wide review of milk prices.

Paul Brannen, MEP (above with North East MEP Jude Kirton-Darling) for the North East and Labour’s European Parliament spokesperson on agriculture and rural development, said:

“It is simply not fair for a dairy farmer to be paid less for a litre of milk than it costs to produce. We must collectively and speedily inject fairness into the relationship between dairy farmers, processors, supermarkets and, importantly, customers . . .

“We also want the UK government to write to the banks encouraging them to be as supportive as possible of dairy farmers during this difficult period, including making loans available.

“And in the longer term we want to see farmers working together more, in order to increase their clout in the market and move themselves up the supply chain, by investing in food processing and the production and marketing of processed products such as cheese and yoghurt, as this is where the money can be made . . .

“We are calling on the British consumer to ask probing questions of their supermarket manager, as they have done in the past about fairly traded products from the developing world, to find out if a fair price has been paid to the farmer for the milk we buy.”

Paul adds: “We want to see more powers given to the Groceries Code Adjudicator, whose role it is to ensure there is fair play between British food processors and retailers, so she can take action across the supply chain.