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Agriculture: Dairy


3.15 pm

Asked By The Lord Bishop of Wakefield

The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Davies of Oldham): My Lords, our goal is a dairy sector that produces for the market and is profitable, thriving and competitive. It should meet consumer needs while protecting and enhancing the natural resources it depends on to safeguard our future production. We work closely with the dairy industry through the Dairy Supply Chain Forum to develop the milk road map, and contribute to the debate in the high-level group in Brussels.

The Lord Bishop of Wakefield: My Lords, one could ask questions on this subject till the cows come home.

Noble Lords: Oh!

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The Lord Bishop of Wakefield: I thank the Minister for his kind reply. At present, however, the costs of production are more than the price that many milk producers are getting for it. What additional measures are being put in place, alongside the emergency measures of the dairy fund, for the future continuance of the dairy industry?

Lord Davies of Oldham: My Lords, the emergency measures are important, but I think that the right reverend Prelate will appreciate, as will the whole House, that we are concerned that the dairy industry should establish itself for a profitable future. That means larger herds and a concentration of dairy production. We welcome the fact that Europe is thinking along the same lines. As we are better placed than many other European countries' dairy industries, we look forward to improved fortunes for the dairy industry in the future.

Lord Davies of Coity: My Lords, I wonder whether the Minister agrees that to ensure the future sustainability of the dairy sector, we should re-establish the Milk Marketing Board?

Lord Davies of Oldham: My Lords, this Government always go forward rather than back.

Lord Plumb: My Lords, I speak as an ex-dairy farmer. Does the Minister share my concern and understand the anger of many dairy farmers throughout the land who have seen their herds decimated through bovine TB? Forty thousand cattle with TB were lost or slaughtered last year; I think it was 41,000 the year before. And so it goes on. And so it will go on this year. Some of those animals and herds have been totally decimated. One can therefore understand the reaction. What is the cost to the taxpayer of dealing with the problem? Furthermore, what is the cost to the nation of the loss of production of both milk and dairy products that could be produced in this country, when we are in fact importing millions of litres of milk which would be totally unnecessary if only this disease could be got under control?

Lord Davies of Oldham: As the noble Lord will know, we also export a considerable amount of milk. However, I entirely accept his point. The Government are greatly concerned with exactly the issue he identifies-the horrors that bovine TB visits on the dairy herd and, in fact, cattle in this country. If we thought that there was one straightforward answer that would solve the problem, the Government would of course leap on it. We are all too well aware of the agony of the situation for farmers and of the costs to the country. However, I emphasise that there is no clear evidence that the culling of badgers will solve the problem; in fact, the process of culling might make the problem more difficult. However, we are carrying out a project to trap and vaccinate badgers in six areas in England which have a high incidence of bovine TB in cattle. We are also watching the Welsh experiment, where a badger cull is being carried out in a limited area. We are of course open to persuasion that progress could be made along those lines.

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Lord Greaves: My Lords, the Government recently announced the appointment of an ombudsman to deal with relationships between supermarkets and their suppliers. How long will it be before this ombudsman is able to take action that results in dairy farmers being paid a fair price for their milk by all the supermarket chains?

Lord Davies of Oldham: My Lords, the Minister in the Commons, my right honourable friend Jim Fitzpatrick, already chairs a dairy industry supply chain forum which meets twice a year and has gone some way to tackling some of these issues. The noble Lord has identified a very important issue indeed: the relationship between the power of the supermarkets and producers in this country, which affects the dairy industry as much as it does other industries. That is an issue on which, as he indicated, our proposal with regard to the ombudsman is designed to make progress.

Baroness O'Cathain: Does the Minister really think that having his right honourable friend chair a meeting twice a year will satisfy those poor dairy farmers? Does he know how many dairy farmers leave the industry each week? That is the problem: two meetings a year. It is not good.

Lord Davies of Oldham: My Lords, we appreciate the difficulties of the dairy industry: we are all too well aware of the collapse of a significant part of the industry last year. However, I emphasise to the noble Baroness that there are very good reasons why we should believe in the growing prosperity of the industry against a background in which it becomes increasingly market-competitive. It is quite clear that, whereas others have had an advantage against us through the existing subsidies of the old CAP regime, Europe is changing on that perspective, from our persuasion. We will be better placed to take advantage of the future regime.