§ Mr. Barry JonesTo ask the Secretary of State for Wales what discussions he has had with dairy producers concerning the price of milk; and if he will make a statement. [41490]
§ Mr. Win GriffithsI am conscious, through discussions with the farming unions and directly with dairy producers, that farm gate milk prices have fallen compared to last year. The latest available information suggests that in March this year, producers received on average 19.72 pence per litre. This was nearly 4 pence per litre down on the same period the previous year. This is mainly due to the effects of the strong pound which has reduced farm profitability across a range of sectors and mirrors the occasions in the past when sterling was weak and farming profitability often improved. However, the Government appreciate the present difficulties in the dairy sector and we are keeping the situation as it develops under close review.
In part, low prices are due also to the apparent lack of demand for milk for manufacturing. I am aware that farmers have concerns about the rules governing the selling system which they believe to be contributing to the low milk price they currently receive. The Monopolies and Mergers Commission is currently investigating the supply of raw milk in Great Britain following a referral by the Office of Fair Trading. The Government welcome this investigation which will examine all aspects of the current selling system.