Dairy fund should support promotional schemes, says Dairy UK

By Guy Montague-Jones

- Last updated on GMT

Related tags: Dairy uk, European union

Promotional schemes to increase demand for dairy products should be the focus of the new €280m emergency dairy fund, according to Dairy UK.

EU agriculture commissioner Mariann Fischer Boel said no decision has been made on how the fund would be allocated. The European Commission announced the aid package earlier this week following months of protests from dairy farmers struggling to cope with low milk producer prices.

Dairy industry association Dairy UK urged the Commission to consider promotional activity as tool to increase demand, boost producer prices, and benefit farmers, manufacturers, and processors.

Demand focus

“Frankly, the urgent need at the moment is to restore demand as we move out of the recession,”​ said Dairy UK director general Jim Begg. “So we would support expenditure on promotional schemes designed to grow the market and improve returns for everybody.”

Defending the effectiveness of such schemes, Dairy UK pointed to market data recorded following the White Stuff campaign run by the Scottish Dairy Marketing Company.

Supported by the Scottish initiative, milk consumption in Scotland increased 5.5 per cent between October 2006 and October 2008, while consumption in England and Wales over the same period rose 2.4 per cent, according to TNS data.

Quick action

Begg warned that promotional money must be spent quickly to be effective. He said: “If money can be fed into the system quickly, it can be made to count. And this won’t slow down the process of structural change which the Commission has repeatedly stated is necessary.”

Ultimately it is up to the EU Council of Finance Ministers to decide how the money should be spent. UK farming minister Jim Fitzpatrick has already set out his point of view on how the money should not be spent.

Fitzpatrick was quoted earlier in the week as saying: “We want to see a viable and competitive dairy sector in Europe, but will not support anything that takes us backwards to a regime of heavy market support for inefficient dairy producers at the expense of taxpayers and consumers.”

Related topics: Markets

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