The Government must give the Groceries Code Adjudicator more powers, the taxman should be more helpful and the EU step in with milk price intervention, Alan Reid MP believes, to help the nation's beleaguered dairy farmers.
The fall in the milk price is causing serious problems for British dairy farmers, the Argyll and Bute MP told a debate on the industry in Parliament on Wednesday.
"In my own constituency dairy farmers are mainly concentrated in Kintyre and Bute. There are many dairy farms in Kintyre and the industry is a vital part of the local economy which would struggle without the dairy industry," said Mr Reid. "As well as direct employment on the farms themselves, the dairy industry supports many other local businesses, including the Campbeltown Creamery which makes the famous Mull of Kintyre Cheddar."
He added that the cooperative First Milk, to which all Kintyre's farmers belong has a part to play in Kintyre: "I would urge First Milk to invest in the creamery and secure the future of both the creamery and the local dairy industry. Grants from the Scottish Government have been offered provided First Milk make their own investment."
"While there is widespread agreement that dairy demand will outstrip supply in the long term, creating real opportunity for the UK dairy supply chain in the future, clearly farmers have to survive the current crisis.
"EU intervention should be considered until the situation with the protracted Russian import ban and other market forces are resolved.
"Price intervention is currently set too low to have any effect before the situation becomes even more serious.
"I very much welcome the Government’s decision to grant the Groceries Code Adjudicator the power to fine supermarkets that have breached the Groceries Code. I hope very much that this will act as a deterrent to supermarkets.
"However, many dairy farmers don’t currently come within the scope of the Groceries Code, because they don’t sell directly to the supermarkets. The Code must be extended to include complaints from indirect suppliers, such as dairy farmers. I believe the Code is not due to be reviewed until next year. I urge the Government to bring this review date forward.
"The Adjudicator, should be able to be proactive and be seen as a genuine threat to those who breach good practice. In times of price falls it is the primary producer, the dairy farmer, whose businesses are impacted by the low prices. Those further up the supply chain pass price cuts down the chain, but the long suffering dairy farmer has nobody else to pass a price cut to and they have to take the hit themselves.
"HMRC have got to be more helpful and allow dairy farmers to spread profits over several years."
The Groceries Code Adjudicator ensures that large supermarkets treat their direct suppliers lawfully and fairly; it investigates complaints and arbitrates in disputes and is the UK’s first independent adjudicator to oversee the relationship between supermarkets and their suppliers.
With commentators estimating that the current crisis in the dairy sector could continue into the third quarter of 2015, it is now more important than ever that measures are put into place to stabilise the sector and provide some much needed security for dairy farmers.