HC Deb 24 June 2004 vol 422 cc1436-8
4. Richard Younger-Ross (Teignbridge) (LD)

How many dairy farmers have left the industry in the last 12 months. [180207]

The Secretary of State for Environment, Food and Rural Affairs (Margaret Beckett)

We do not hold figures for the number of dairy farmers who have left the industry. The agricultural census for England shows that between June 2002 and June 2003, there was a net reduction of 786 holdings where dairy farming is the predominant activity

Richard Younger Ross

May I suggest that the Secretary of State should hold such figures? At the beginning of this week, the Western Morning News reported that many farmers in the south-west are losing up to £24,000 a year and that more than 3,000 dairy cattle a week are being sold off. My constituent, Anthony Rew, questioned me the other day about how he could continue in the dairy industry when last year he received less than 17p a litre. What action will the Secretary of State take to preserve the British dairy herd from decimation?

Margaret Beckett

I am sure that the hon. Gentleman is well aware that there is overcapacity in milk production. He will also be aware that the Government have taken initiatives through the Food Chain Centre and through my noble Friend Lord Whitty and the Dairy Supply Chain Forum. Through those means, a considerable amount of advice is available to the industry. The hon. Gentleman will also be conscious of the fact that there are genuine problems in dairy and that they are not necessarily resolvable at the wave of a ministerial wand.

Mr. Lindsay Hoyle (Chorley) (Lab)

I know that my right hon. Friend is very concerned about the future of farming in the UK, but dairy farming in particular has suffered. We can see that the monopolies of the supermarket are not fair. There should be a fair price at the farm gate to ensure that dairy farming continues and that we can attract young people into dairy farming. If we cannot do so, we will see the end of such farming in the UK. We need help and protection, and I will welcome whatever support she can give.

Margaret Beckett

I understand the concern that my hon. Friend expresses. The latest milk price, the April price, was the highest April price since 2001, at just under 18p a litre. He rightly said that this is a long-running saga. There is concern in the industry and there are difficulties, but he will know that the Office of Fair Trading has recently undertaken a compliance audit of the supermarket code of practice in order to try to address some of the concerns that have been raised by hon. Members in all parts of the House.

Andrew George (St. Ives) (LD)

Following on from the question of the hon. Member for Chorley (Mr. Hoyle), does the Secretary of State accept that dairy farmers in the UK are among the most efficient in Europe? She must reflect on the fact that they are being paid less and going out of business in their droves. What discussions has she had with the Secretary of state for Trade and Industry? Does she accept that now is the time to strengthen the supermarket code of practice to ensure that dairy farmers and other farmers are given the proper protections in the market that they richly deserve, now?

Margaret Beckett

I can only repeat that there are, and have been for a very long time, genuine problems in the dairy industry. The Office of Fair Trading has considered the position and reported on a number of occasions, but it has responded, as we hoped that it would, to the concerns that continue to be expressed by producers. For that reason, it has undertaken a compliance audit, and we await the results. I am afraid that there is no point in hon. Members continuously saying, "Let us look at it again." We have many conversations with my right hon. Friend the Secretary of State for Trade and Industry and, through her, with the Office of Fair Trading. I can only say yet again that, however often the matter has been looked at, the Office of Fair Trading has up to now been unable to find the sort of distortion of competition that I know many in the industry suspect exists. I repeat that it is presently undertaking a further compliance audit, and we await the results.

Mr. David Drew (Stroud) (Lab/Co-op)

My right hon. Friend will have seen the report from the Select Committee on Agriculture, which highlighted the level of distrust in the industry. One of the recommendations made by the Committee was that the Government should remain in the chair in the supply chain initiative to ensure that the sector pulls together. Will she ensure that that continues to happen?

Margaret Beckett

Yes, indeed, I will. Many people welcome the Dairy Supply Chain Forum's work, and we will continue to keep up the pressure. That includes, for example, our acceptance of the Select Committee's recommendation, which I warmly welcome, that the OFT and the Competition Commission should do more to convey the fact that the dairy sector understands that they are not opposed to vertical integration in the sector. The Select Committee report, to which we shall respond in due course, is interesting, and it confirms the existence of considerable, long-standing problems.

Mr. Michael Jack (Fylde) (Con)

I am grateful for the Secretary of State's acknowledgment of the importance of the Select Committee report on milk pricing. Can she assure me that one of the priorities for the Dairy Supply Chain Forum will be to establish a proper dialogue about openness and transparency in the milk industry, because different sections of the industry seem not to engage in such a dialogue? Will she also ensure that Lord Whitty understands what the forum is about? When I asked him what it does, he said: I am not sure of the precise terms of reference".

Margaret Beckett

First, I share the right hon. Gentleman's view that greater openness and transparency are required, and, secondly, I share the Select Committee's view that many of the sector's difficulties are issues for the industry, although it is important for the Government to do what we can to help the industry to help itself. I was slightly surprised by the right hon. Gentleman's remarks about my noble Friend Lord Whitty, because most people know how well my noble Friend understands the difficulties and how much he has done to help.