UK Government intervenes in milk price crisis

- Last updated on GMT

Related tags: Dairy industry

The debate over UK milk prices last week took a step up in
intensity. The Environment, Food and Rural Affairs Committee
announced its plans to carry out an inquiry aimed at bridging the
gap between retail prices and production prices for milk. In the
same week the Liberal Democrats released a consultation paper to
representatives in the dairy industry, and the Farmers for Action
group staged yet another protest.

The committee said that Farmers who had fought for fairer milk prices would have the opportunity to submit a written explanation of the problems which they claim are damaging the very fabric of the UK's dairy industry.

EFRAC hopes that its inquiry will urge the multiple-retailers to pay back returns to dairy farmers, and in turn they would be reinvested into the dairy industry.

The Committee said that it will examine "the market price and farm-gate price of milk, and investigate why recent rises in the former have not led to increases in the latter".

Milk pricing has long been a heated debate in the UK, but it is thought to be an issue that could soon come to an end. One group, Farmers for Action believes that government intervention is needed for the problem to be resolved.

Farmers for Action continued applying pressure on retailers last week by blockading a Waitrose supermarket depot. The group claims that its members are being paid on average 18 pence per litre for milk that is costing the farmers 20 pence to produce.

Liberal Democrat Shadow Rural Affairs Secretary, Andrew George, on Friday circulated a consultation paper to representatives of the dairy industry. He claimed that the Liberal Democrats are fighting to "give dairy farmers a fair farm-gate price".

"I fully understand why many dairy farmers have felt that they have no choice other than to take their protest to the gates of milk processors and supermarkets,​ George stated. "The question now is not whether to intervene but by how much. Clearly it is not in anyone's interest to simply add further layers of regulation and bureaucracy. But it would be an act of gross negligence for the government not to recognise that it has responsibility to help find a solution to a dysfunctional market through measures that do not commit further public funds to the industry,"​ he added.

George hopes that the consultation paper will provide the basis for some urgent discussions and will act as the foundation for government action.

The committee is encouraging all interested in the debate to submit written evidence by 9 January.

Related topics: Markets, Pricing Pressures, Fresh Milk

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