Dairy Industry — [Mrs Linda Riordan in the Chair]

Part of the debate – in Westminster Hall at 2:53 pm on 5th November 2014.

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I would certainly encourage people in Wales to eat Welsh cheese and to drink as much Welsh milk as possible. My daughter is on a pint a day, so I am doing my bit for the cause.

The industry also faces other long-term challenges, in particular the end of milk quotas next year. Competitors in Ireland are preparing for this by increasing milk production, and unless there are strategies in place to help Welsh farmers, we could have a long period of milk price instability. I fear that there is a lack of political direction at Welsh Government level. In a recent evidence session of the Welsh Affairs Committee, the new the Secretary of State for Environment, Food and Rural Affairs seemed to indicate to me that the current difficulties were likely to be short-term. I invite her to reconsider her position and to put in place interventionist measures to help the industry before we face another serious crisis, like the one we faced a few years ago.

I want to list a series of interventions that are needed, from the Department but primarily from the Welsh Government. We must ensure that all that can be done is done, and that no one in the supply chain is using the current downward price trend as a convenient excuse to make additional cuts to farm-gate prices. We need retailers who use milk as a loss leader to ensure that they fund those deals from their own profit margins and not from the pockets of farmers. It is vital that those retailers put transparent pricing mechanisms in place and ensure that suppliers are compliant with the voluntary code.

Put simply, milk being sold cheaply devalues the product in the eyes of consumers, and this could have long-term negative ramifications for the sector as a whole. It is extremely worrying to every dairy farmer to see milk being used as a battleground between retailers.