1 Introduction
1. In the latter half of 2003, dairy farmers took
direct action against processors and retailers on a number of
occasions, to protest about what they regarded as a failure to
transmit to them an increase of 2 pence per litre in the retail
prices of liquid milk and cheese, made in July and September 2003
respectively. The lobby group Farmers for Action (FFA), which
was responsible for organising the protest action, described the
situation in July 2003 as "Processors playing the hokey cokey
with our 2p!"[1]
The FFA website asked:
Why is it every time there is an initiative to try
and save [the] primary producers' dairy industry with the consumer
dipping their hand in their pocket to ensure this, supermarkets
agree to collect it, but then processors become God and feel they
should keep some of it? How many times have farmers been told
we are out there working hard trying to get every half penny to
pass back to the primary producer, and on this occasion FFA have
caught at least one processor with its trousers down![2]
2. It was against this background that, in November
2003, we decided to examine the market price and farmgate price
of milk and investigate why recent rises in the former had not
led to increases in the latter. We appointed a Sub-Committee to
carry out the inquiry. The Sub-Committee was chaired by Mr David
Drew; its other members were Mr Colin Breed, Mr Michael Jack,
Mr Ian Liddell-Grainger, Diana Organ, Paddy Tipping and Mr Bill
Wiggin.
3. The Sub-Committee received 24 written memoranda
and took oral evidence from: the National Farmers' Union for England
and Wales; the Royal Association of British Dairy Farmers; Farmers
for Action; Milk Link Ltd; Robert Wiseman Dairies; Dairy Crest;
Arla Foods UK; the British Retail Consortium; the Federation of
Milk Groups; the Dairy Industry Association; the Milk Development
Council; the Minister for Food, Farming and Sustainable Energy,
Lord Whitty of Camberwell, together with Defra officials; the
Office of Fair Trading and the Competition Commission. We are
grateful to all those who gave evidence or otherwise assisted
with our inquiry.
4. Issues relating to the UK dairy industry have
been examined by two other parliamentary committees within recent
years. Our predecessor Committee, the former Agriculture Committee,
reported on the marketing of milk in February 2000.[3]
In December 2001, the Welsh Affairs Committee took oral evidence
from a number of witnesses on farming and food policy in Wales,
including the Welsh dairy industry; this evidence was reported
to the House in August 2002.[4]
1 www.farmersforaction.org Back
2
Ibid. Back
3
Agriculture Committee, Second Report of Session 1999-2000, The
Marketing of Milk, HC 36-I Back
4
Welsh Affairs Committee, 5 August 2002, Minutes of Evidence
for Tuesday 4 December 2001 and Tuesday 11 December 2001: Farming
and Food Policy in Wales, HC 427-i-ii Back
|
