MPs call for action over low milk prices

By Chris Mercer

- Last updated on GMT

Related tags: Milk prices, Milk, Dairy farming, Government

A group of MPs in the UK have called on the government to step in
over low farmgate milk prices, which they claim are taking ruthless
advantage of dairy farmers.

The closure of around 500 dairy farms since last July is not the result of market forces but of supermarkets and others purposefully holding milk prices below the cost of production, said Daniel Kawcynski MP. His comments came as chair of the All Party Parliamentary Group (APPG) on Dairy Farming, containing around 100 MPs, which has issued its end of year report. The damning criticism keeps farmgate milk prices firmly in the public eye, only weeks after the UK Competition Commission said it had concerns about the sector. Lindsay Hoyle, vice chair of the APPG, echoed calls from some farmers for government intervention. "I believe that the Government needs to intervene and work with the farming industry, milk processors and supermarkets to ensure that farmers receive a guaranteed minimum price somewhere in the region of 20 to 21 pence per litre." ​ Hoyle alluded to recent fears that Britain may end up importing more milk. "I do not want to see the dairy sector collapse with the UK becoming dependent upon milk from abroad." ​ The government could possibly avoid direct intervention by reducing the amount of red tape surrounding dairy farmers, Hoyle added. Several dairy industry leaders have argued against government intervention, repeatedly placing their faith in the free market and the ability of the whole industry to find common ground. Average prices paid to milk producers have fallen from 24 pence per litre (ppl) 10 years ago to around 18ppl, below the cost of production for some. Some consolidation has been expected, but recent industry figures also show that more large and efficient businesses have left the sector over the last two years than was anticipated. The Competition Commission has now said it will in investigate the situation further, as part of its UK grocery supply chain probe.

Related topics: Markets, Fresh Milk, Pricing Pressures

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