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Pressure on Paice to Deliver on Dairy as EU Fails

The UK dairy sector’s eyes will now turn to UK Agriculture Minister, Jim Paice to create the change for good for the nation’s milk producers where the EU has failed. This was NFU Scotland’s contention on the day that the EU announced its long-awaited but ultimately watered down Dairy Package.

The initial proposals for the EU Dairy Package - which came about as a response to slow-burning difficulties for the EU’s dairy producers and which became particularly acute in 2009 - were welcomed in good faith by NFU Scotland, which has been working intensely on the Package since it was first drafted.

Hopes were raised when the European Parliament announced that it supported compulsory contracts and a producer organisation upper limit of 40%. Both these elements have, disappointingly, been diluted significantly.

NFU Scotland’s Vice-President, Allan Bowie said:

“Following this morning’s Trialogue meeting between the EU’s Council, Commission and Parliament, an agreed text on the EU Dairy Package was announced. The agreement is in many ways disappointing as it is clearly a political compromise which has missed a real opportunity to maximise on the EU High Level Group on Dairy’s excellent recommendations.

“The High Level Group identified two main issues which had to be resolved to ensure that the risk and opportunities in the supply chain were more evenly shared: these were effective contracts and greatly increased negotiating powers for producers.

“NFU Scotland, supported by the Scottish Government, have resolutely campaigned for compulsory contracts across the EU and a scale of producer organisations that would give dairy farmers the chance to match the scale of dairy processors. The compromise that the Trialogue has agreed is that Member States can decide whether to make contracts compulsory or not, and they have conceded on the scale of PO’s, which are now limited to 30% of a Member State’s production. The recommendation from the EU Parliament was that they should be set at 40%. EU compulsory contracts would have had to include minimum requirements as dictated by the Dairy Package. Where Member States decide to introduce compulsory contracts, these will still have to abide by the Dairy Package’s minimum requirements, however, where contracts are voluntary, they will not be subject to these standards.

“This compromise lacks vision, and we are disappointed that the European Parliament’s views appear to have been lost in the discussions. All is not lost, however, as Jim Paice, the UK Agriculture Minister has committed to consulting on whether England should have compulsory contracts. The Scottish Government has stated that it too will consult independently and is aware that Scotland could go it alone.

“On PO’s, even at 33%, this represents around 4.5bn litres of milk that a UK PO could control. NFU Scotland has, and will continue, to look at the potential of PO’s to improve producers’ position. We are determined that the excellent work of the original High Level Group is not wasted and, in conjunction with the UK Dairy Supply Chain Code of Practice, negotiations will improve the effectiveness of the UK dairy supply chain for the benefits of all involved.”

Ends

Contact Sarah Anderson on 0131 472 4108

Date Published:

News Article No.: 191/11


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