APPENDIX 10
Memorandum submitted by Mrs Jane Schwier
(Q15)
I am writing to express my concerns regarding the
future of the dairy industry. With the decrease in milk price
that we have had to endure over the last two years and with no
prospect of any increase likely in the near future, many dairy
farmers will be forced out of business. I anticipate that this
year we will break even, but make no profit to reinvest in the
business which is not a healthy way to go forward. We are one
of the luckier ones as we have a high yielding herd with good
margins, but if we can not make any profit out of producing milk
to a high standard you can imagine that there are countless other
dairy farmers that are in dire straits.
The main reason I see for the decrease in profits
is the failure of the milk selling rounds, that have resulted
in a decrease in price per litre owing to the collaboration of
the milk purchasers to drive the price down, so they can maintain
their margins. If Milk Marque were allowed to have a vertically
integrated business as all other milk selling groups do in Europe,
then they would be able to deflect surplus milk into processing,
add value to the product and maintain milk price at a higher level.
With the powers the main supermarkets have over suppliers,
the price has decreased to producers by 29 per cent, over the
last two and a half years, with further cuts notified for June
and July, while the price in supermarkets has not reflected any
of this decrease at all. How many other commodities in the supermarkets
have not had an increase in price for several years?
The British public expect a quality product which
we are producing for them to high welfare and quality standards
which Europe cannot match, yet added value products are being
brought in to the country of an inferior standard, and sold as
being packed in the UK which is very misleading. Given the chance
a vertically integrated co-operative would be able to raise the
returns to British dairy farmers, which would help the industry
from bankruptcy.
15 June 1999
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