Jim Shannon – 2016 Parliamentary Question to the Department for Environment, Food and Rural Affairs

The below Parliamentary question was asked by Jim Shannon on 2016-07-18.

To ask the Secretary of State for Environment, Food and Rural Affairs, what steps her Department is taking to ensure that dairy farmers receive a greater proportion of the profits of their produce compared to other elements of the supply chain.

George Eustice

The voluntary Code of Practice on contractual relationships has been extremely important for improving relationships across the dairy industry through greater transparency and predictability in milk pricing arrangements. It is for the industry to review it and check that it is working. The Code was last independently reviewed in 2014 which showed that it has been effective, but the review made some recommendations which its signatories (Dairy UK, NFU Scotland and the NFU) are taking forward.

The Groceries Code Adjudicator also has an important role to play in changing behaviours and the overall culture of the sector. A review of the Grocery Code Adjudicator is due this year and we will look at how this can help the farming industry.

The Agriculture and Horticulture Development Board has established a Volatility Forum which brings together government, the farming industry and wider supply chain to catalyse knowledge exchange and long-term engagement with new risk management tools. It is exploring options such as forward contracts and use of futures markets, which could give farmers more certainty over price and share risk throughout the supply chain.

Retailers have also shown their support for the British dairy industry. For example, Tesco has pledged that all own-brand yoghurt will now be made with British milk, Morrisons has launched the ‘Milk for Farmers’ brand that allows customers to pay more if they want to support British farmers and Arla has launched ‘Arla Farmers Milk’ where an additional 25p of the retail price of a four pint carton is paid to its farmers.