Examination of Witnesses (Questions 140
- 144)
WEDNESDAY 14 OCTOBER 2009
MS HAYLEY
CAMPBELL-GIBBONS
AND MR
GWYN JONES
Q140 Paddy Tipping:
No, what is your view?
Mr Jones: My own view would be
a month if prices cannot be agreed, which would be very rare because
the pressures would be immense on both sides, of course, with
tremendous responsibilities on farmer representatives as well
as the company, but if they totally fail I would say within a
month. Otherwise, we would have people who handed notices in and
within 12 months they are in a recession and the buyer is not
there any longer. So there are all sorts of reasons to make sure
that they can move quickly if things are not going as they should.
Ms Campbell-Gibbons: I just want
to absolutely clarify though. We advocate long notice periods
and partnerships between people in the supply chain, but with
the current terms and conditions a long-term partnership arrangement
is a concern to us. So you have that safety net to allow you to
get out if things go wrong, but we do want to advocate long-term
partnerships or relationships.
Q141 Paddy Tipping:
You talked about a template that you have got. Are you going to
let us have that?
Ms Campbell-Gibbons: Yes, we do
have a template, which I will send you a copy of.[9]
Mr Jones: We believe that a proper
contract would be beneficial for both sides, without a shadow
of a doubt. It would bring farmer and processor closer together.
There is no doubt about that.
Q142 Chairman:
The Government played an important role in helping to facilitate,
if you like, the rescue package that was ticking the box. When
we look in the wider context at the dairy industry—I forget
its name—the sort of Dairy Board, the great and the good
meeting and talking about things, I think Defra likes to look
across the horizon and facilitate meetings and do all kinds of
things, we have talked an awful lot about the structure of the
dairy industry because, quite clearly, that does impinge or did
impinge on the financial well-being of dairy farmers. If you had
a free hand in defining what you think government could or should
do to facilitate genuinely a healthy dairy industry, what advice
would you give Hilary Benn?
Ms Campbell-Gibbons: I can talk
about the Dairy Supply Chain Forum, which is what I think you
were referring to earlier, that has been a useful forum. Certainly
a few years ago, when there was very little dialogue between retailers
and processors and farmers, that forum had a very important role
to play. The industry has moved on now and relationships are a
lot better, but I think that there are still some fundamental
debates that we have to have as an industry that we are possibly
not having out in the open; and looking at the reasons why milk
production is falling and actually tackling some of the issues
there, I think that government can have a role to play in facilitating
that, looking at the role of milk contracts in the dairy industry.
It is something that the Commissioner has picked up on as a tool
for reducing volatility and introducing stability. So, again,
knowing what Defra's position is on that and getting them to facilitate
a debate rather than it always coming from the farming union angle
I think would be very interesting. If you look at the more regulatory
side of things, then of course we believe there are areas where
Defra and government would generally take the cost and burden
away from dairy farmers, and there are numerous examples that
I could give you of that and I would be happy to submit them separately.[10]
Q143 Chairman:
Moving for a moment to the specifics, farmers who were affected
by the collapse of Dairy Farmers I think made two requests, and
these were underlined by the union. One was a request from HMRC
with reference to their tax position, and the second was whether
there could be some derogation or delay from the full implementation
of the Nitrate Vulnerable Zone requirements. Have you had any
kind of positive feedback from government on either of those points?
Ms Campbell-Gibbons: No, we have
not. We have had a negative response from the minister regarding
our request to extend the implementation period for NVZs. That
has been turned down, unfortunately.
Chairman: Did he give a reason?
Q144 Mr Cox:
I am sorry, could are you repeat that?
Ms Campbell-Gibbons: I think we
sent a copy of the letter with our documents. We requested an
extension to the implementation period for NVZs to four years—we
have currently got three—because we believe that the industry
had suffered a terrible blow and that this would be a good signal
to the industry from Defra that they understood and had to be
sensitive to the demands that it placed on it. We have been told
that this is not possible within the regulations, so farmers will
not be getting an additional year, which is very disappointing,
and on the HMRC issue we have not had a response yet. I believe
that that has not been resolved.
Chairman: Okay. Thank you very much indeed
for the evidence that you have given orally this afternoon, thank
you in advance for the further information you are going to kindly
supply us in writing and, again, our appreciation for the written
evidence that you sent before. Thank you very much indeed.
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