15 February 2011

2 minute read

Europe

Speaking at the opening of the National Farmers Union Conference in Birmingham, Mrs Spelman said there are real opportunities for British dairy farmers to exploit markets both at home and in the developing world.

"We want to see British businesses demanding British dairy products - demand usually raises prices - and we are helping through country of origin labelling and government buying standards," she said.

She said the government is backing the work of the Dairy Supply Chain Forum, which she said is the "engine room for change".

She said that the proposals that have been put forward by the European agriculture commissioner, Dacian Ciolos, will allow producers to band together to negotiate contracts.

"This is a great opportunity to increase your bargaining power," said Mrs Spelman.

She added that there is scope for the sector to get a better deal through its own bargaining power.

In answer to questions and complaints from farmers that they are losing between 4p and 5p per litre on milk prices, Mrs Spelman said that she will support the sector and look at areas where there are distortions.

However, she added that the way forward is for farmers to group together to increase their bargaining power.

"No business can withstand flat prices with rising input costs," said Mrs Spelman.

"But there is a problem of structure within the industry."

The agriculture secretary added that there is a need to look at how milk is sold both as a raw commodity product on the domestic market and also as a product being sold into processing.

She said there could be good opportunities for export of products such as skimmed milk powder.

Mrs Spelman also said that if there are any abuses of the supermarket and processor pricing system, DEFRA will look at them and take action.

"To ensure fairness here, the Government is creating the Groceries Code Adjudicator," she said.

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