NFU welcomes Efra milk report
The NFU today welcomed the Efra committee's report on milk pricing, the key findings of which largely reflected the evidence given by the NFU to the committee.
The main conclusions of the report are:
· There is a lack of transparency and trust in the supply chain. Evidence shows suspicion, mistrust and pre-occupied self-interest. The report states that some responses were at best opaque, at worst disingenuous. · The dairy industry has been unable to exploit the benefits of greater vertical and horizontal co-operation. · There remains a fundamental imbalance of negotiating strength between supermarkets and most of their suppliers, something the supermarket code of practice has failed to redress. NFU dairy board chairman Gwyn Jones said: "The NFU has consistently argued the need for greater co-operation, both vertically and horizontally amongst all sectors of the dairy industry.
"The report focuses on liquid milk but there is a bigger picture and equal consideration needs to be given to the rest of the market and indeed to the lack of innovation and new product development. "A key concern in the past has been where farmer co-operation has been inhibited by competition constraints. It is important that the government and competition authorities take heed of the report's findings. The NFU strongly agrees with the report's conclusion that the imbalance of power between dairy producers and the major supermarkets needs to be addressed. "The NFU believes this report is an informative analysis of the events leading up to the price negotiations last autumn.
We must all learn the lessons of that experience. "Farmers want to be able to operate efficiently and profitably within their chosen marketplace and whilst this has not been possible in the past, the current market outlook is positive with firm commodity prices, stability in the cheese market and low seasonal supply.
"This provides the perfect opportunity for stability in the marketplace which is vital in order to foster co-operation and collaboration and ensure the dairy farmers can operate profitably within a transparent marketplace."
