Milk Marketing Schemes (Hansard, 7 July 1994)

§ Mr. Lang

The Agriculture Act 1993 provided for the ending of the statutory milk marketing schemes. It enabled the milk marketing boards in Scotland to submit proposals to me for their replacement by voluntary arrangements, for the transfer of their assets to specified successor bodies, and for the distribution of the value of those assets to milk producers.

The Scottish Milk Marketing Board, the Aberdeen and District Milk Marketing Board, and the North of Scotland Milk Marketing Board all submitted proposals to me last October following which I conducted a wide-ranging consultation of the various parties with an interest. Subsequently, and in the light of the responses to that consultation, the boards submitted amendments to their reorganisation schemes and I conducted a further round of consultation. I have now concluded that the requirements of the Act have been met and that, having regard to all the circumstances, including in particular the considerations specified in the Act, the schemes submitted by the boards should be approved.

The Act requires that the principles of the approved reorganisation schemes be made public. The principles of the schemes as submitted, and subsequently amended, by the milk marketing boards were set out in the two consultation documents issued by my Department in October 1993 and May 1994. Although some further detailed amendments have been made by the boards to their schemes, the principles as set out in those documents are unchanged. Copies of the documents, together with a note updating them in the light of the further detailed amendments, are available in the Library of the House and can also be obtained from the Scottish Office Agriculture and Fisheries Department.

Under the approved reorganisation schemes, the existing statutory milk marketing schemes will be revoked on 1 November 1994 (the "vesting" date). As a result producers will be free to sell their milk to whom they wish, whether to the successor co-operatives being established under the board's reorganisation schemes, to other co-operatives or marketing groups of producers, or direct to dairies or to manufacturers of milk products. The price at which untreated milk can be bought will no longer be determined by the existing joint committee arrangements and according to its ultimate end-use but by contract between the purchaser and his supplier.

The Scottish Milk Marketing Board will be succeeded by two separate companies, a producer co-operative, Scottish Milk Ltd. and a commercial company, Scottish Pride Holdings plc. The Aberdeen and District Milk Marketing Board will be succeeded by a single company 273W co-operative, Aberdeen Milk Company, and the North of Scotland Milk Marketing Board by a single co-operative, the North of Scotland Milk Co-operative.

In view of the delay in the vesting date from 1 April 1994 to 1 November 1994, however, milk producers who have already signed a contract with one of the successor co-operatives will no longer be bound by those contracts, and the boards will be writing to them inviting them to exercise their right to withdraw within two weeks; in the case of the Aberdeen board, the board will be cancelling all existing producer contracts with Aberdeen Milk Company and offering a revised contract. I urge all producers, including those who have not yet signed a contract with anyone, to decide as soon as possible to whom they wish to sell their milk from 1 November 1994 and to enter into a contract accordingly so that the necessary arrangements can be put in place for the uplift of their milk from that date.

I am also about to announce today that, following an announcement by my right hon. Friend the Minister for Agriculture Fisheries and Food on 16 June that she and my right hon. Friend the Secretary of State for Wales will be proposing the establishment of a milk development council for England and Wales, I have decided in the light of the separate consultation I undertook of the industry in Scotland, that Scotland should also be included in this council which will therefore cover the whole of Great Britain. The development council should be operational from 1 November or soon thereafter.

The ending of the statutory milk marketing schemes marks a major step forward in the history of the dairy industry in this country. It will enable competition to flourish in a way not possible before, and the industry will be able to respond better and more quickly to the needs and preferences of consumers.