Milk Prices (Hansard, 29 June 2000)

§ 7. Mr. Laurence Robertson (Tewkesbury)
If he will make a statement about the current level of farmgate milk prices. [127037]

§ The Minister of Agriculture, Fisheries and Food (Mr. Nick Brown)
The Government recognise the considerable problems currently facing the dairy industry. A combination of factors have reduced milk prices and 1033 had a consequential effect on incomes in the sector over the past two years. The farmgate price for milk in April 2000 was 15.25p per litre.

§ Mr. Robertson
The Minister mentions that several factors have affected milk prices, and those include the weak euro and the recent depressed prices of skimmed milk and butter. A third factor is structural problems. Does the Minister now regret encouraging the break-up of Milk Marque, and if so, will he explain what he will do to put the situation right?

§ Mr. Brown
Of course I did not encourage the break-up of Milk Marque; it resulted from an independent report by the competition authorities—the sole ministerial responsibility of my right hon. Friend the Secretary of State for Trade and Industry. If the hon. Gentleman is implying that the Government of the day, regardless of party, should put the views of the competition authorities to one side, I have to say that I completely reject that view. The board of Milk Marque responded very responsibly to the difficult situation in which it found itself; it has devised successor arrangements that will endure, and it has my support in that. Where the Government can provide support to the dairy industry we are doing so, as the Prime Minister's farming summit has shown.

§ Mr. Lawrie Quinn (Scarborough and Whitby)
Will my right hon. Friend join me in praising the producers of the very good TV commercial that promotes milk, using well known milk drinkers such as George Best? Has he made any assessment of how that will help farmers by affecting farmgate prices?

§ Mr. Brown
I was wondering whether my hon. Friend was about to invite me to take part in the campaign on the same basis. I support the generic promotion of milk, and think that it is a way forward for producers.

§ Mr. David Heath (Somerton and Frome)
I also support generic milk marketing. I hope that it will increase the overall volume of milk sold, but increasing the volume will not help the primary producers if the margin at the farm gate is still too small for them to be viable. Is not it important that yet again, we tell the processors and the supermarkets that the health of the whole dairy industry depends on farmers getting a fair return for their milk, and do we not need a joint approach by the Ministry, the processors, the retail trade and the farmers themselves?

§ Mr. Brown
The whole supply chain has a vested interest in the health of its component parts. I make that point to everyone involved every time I meet them, but I cannot order people to adjust the commercial arrangements in the chain, because that is ultimately a matter for the private sector, not for Government.