Organised by the Women’s Institute

SOUTH OF ENGLAND AGRICULTURAL CENTRE

25TH APRIL 2007

Nicholas was a member of the panel

The WI and the NFU teamed up to launch the Great Milk Debate in London on the 23rd April 2007. About 100 debates and actions took place across the country between the 23rd April and the 4th May 2007. The debates were part of the WI’s Farmgate Milk Prices campaign to raise awareness of the issues facing dairy farmers.

Speech by Nicholas Soames MP

I have two memorable quotes from my grandfather, Sir Winston Churchill, to start with:-

My grandfather who was a dairy farmer at Chartwell in Kent once said in a debate in the House of Commons that there was no finer investment that a nation to make than to put milk into babies. He was right and it is not just babies.

2nd quote:-

Winston Churchill – NFU AGM 1959 – “The clever economists who tell us that we don’t need British agriculture and that our farms should be turned into national parks seem to ignore the rather obvious snag that an unfriendly country should starve us into submission in a week”

I want to start by congratulating the WI for their magnificent efforts in securing these great milk debates which are taking place all over the country to highlight the plight of the milk farmers and to try to understand why such an important group of producers should be in such great difficulties all across the country.

I want to say very firmly that for my own part I believe that farming is neither an economic backwater nor an environmental basket case.

Farmers are the pivotal part of a British food industry worth 16% of GDP. That’s big stuff and should command respect and authority from the Government.

Farmers manage 75% of the total land area of this country and they do this by adapting their husbandry practices to embrace environmental issues, such as through agri-environment schemes to the great advantage of the landscape and the countryside.

So let’s be very clear. Farming is doing an important job; farming really matters; but it does need to do more to promote its own case and even though life is very difficult in some agricultural sectors it needs to get more on the offensive.

That is what the WI has done and I believe it will be seen to represent a sea change in the way farming is thought of, and its concerns and ambitions responded to in an effective and coherent manner.

I also want to pay a tribute to the South of England Agriculture Society who do a very great deal to hold high the banner for the farming, food and rural industries. The Society will be playing a key role in the forthcoming Year of Food and Farming in educating the next generation of consumers.

Now, no-one can deny we have come through an exceptionally difficult period for farming: a sustained period of low commodity prices and rising costs; BSE and Foot and Mouth and the unbelievable saga of the Rural Payments Agency.

But it is not all doom and gloom.

I share the vision of a profitable, competitive agricultural sector that is a central part of the solutions to many of our nation’s great challenges:

Climate change

Food miles

Food and energy security

Safe and healthy food

These are all big issues at the forefront of the public’s concern and we cannot ignore them.

Now, not everything I say tonight will meet with the agreement of this audience but over all I think there are big opportunities in the world’s market place resulting from climatic effects, population and economic growth and greater political stability.

There are big opportunities for dairy companies to establish footholds in emerging markets and they need careful advice and support to do this, thus benefiting producers.

Some British dairy companies are capitalising on niche market opportunities but it frustrates me that the industry has not done more to work with organisations like Food from Britain to explore export opportunities further. [However, I must pay tribute to the work of the Taste of Sussex which has been successful in putting in place distribution systems for producers and opened doors to supermarkets such as Budgens.]

I understand that the NFU’s Dairy Board on a recent trip to Germany were struck at how well the German Dairy sector understood the UK market but how little we understood of theirs. In a competitive food market this is a concern and a real problem which must be addressed. It is depressingly not a new problem and one which I found myself when responsible for British food exports.

We cannot hide ourselves from the globalisation of a market economy and it is essential that the UK dairy industry does not get left behind in this process.

There is not much that I can usefully add to everything we have heard tonight from Gwyn Jones, Peter Harding and Philip Hook, Dairy Farmers and Jim Begg the Director General of Dairy UK but looking out to the future the dairy industry needs a Government that will commit to make bold decisions and that will thus help the industry to prosper:-

Firstly, the Government must really get on and tackle the scourge of Bovine TB. I had responsibility for this when I was a MAFF Minister and I know that it is not easy but affirmative action is required. There is no date yet for the publication of the Government’s response to the public consultation but the final report of the independent scientific group that ran the badger culling trials is expected to report this summer.

Secondly, the Government needs to commit to share responsibility for development and delivery of policy as well as cost – this is particularly important in terms of future opportunities and markets, again the beneficiaries would be the producers.

Thirdly, the Government must be prepared to tackle abuses of power in the food industry - we therefore await with interest the outcome of the Competition Commission’s investigation into the supply of groceries by retailers in the UK. The inquiry, which will report by May 2008, has specifically identified for investigation the number of dairy farmers leaving the industry in recent years. The final report must be robust and make strong recommendations to the Government about urgent action to resolve the situation. It is critical that the Commission understands the need to look at the long term consumer interest; extreme competition today may mean less competition and less choice for consumers in the future if British farmers are forced out of business.

As Philip Hook said, It is all very well for the Government and Sainsbury to bang on about Fairtrade for third world producers. It seems to me that we need some fair trade for British Dairy Farmers.

Fourthly, I think there should be an “Ofmilk”; there must be someone to hold the ring and to mediate between the conflicting interests.

Fifthly, the Government needs to ensure that the regulatory requirements of the British Dairy industry are no greater than for other EU Members. Farmers need to be free to spend less time in the office and more time farming – the regulatory system needs to be simplified and the onerous way in which it is enforced and implemented needs to be reformed.

I do not expect the Government to do everything; we all know the Government is not going to jump in with aid packages and new money and the income must be derived from the market.

Nevertheless, the Government has a duty to support the industry in every other way possible.

And in truth even though it may not look like it from where we are all sitting, the Dairy industry has a good story to tell, indeed in many ways a remarkable story.

After all it should be a fantastic market: 60 m of the world’s richest consumers, on an island within a single EU market of 475 million customers.

A structurally efficient milk production base used to dealing with competitive markets. And a retail structure that must rank as one of the most professional in the world. There are plenty of really good things happening in the dairy industry. There are state of the art processing facilities with a clear focus on delivering customers what they want in the most efficient way possible.

But there is a lot which is not good enough.

I’ve seen, since the days that I was a Minister, remarkable innovation in dairy products and a very strong focus on brand development and marketing.

There has been some development in supply chain relationships, which I understand are positive compared to how things were 5 or 10 years ago. Although these are not nearly good enough. And there has been inevitably a painful degree of rationalisation of the sector coupled with farmer ownership of milk processing which are frankly essential ingredients to what I believe will be a successful future.

I know that the industry has gone through a very difficult evolution since deregulation. It has had to learn to work in a very competitive retail market without the benefit of well established commercial brands or a strong equity base in farmer controlled business that exist elsewhere in the EU.

But the collateral damage of all these changes has been very serious, and of course like all of us here I am truly anxious and worried about some of the milk producers – indeed two of my friends are giving up milking in the next few weeks.

I am particularly worried about their confidence in the future and what seems to be the ever on-going exploitation [and frankly this is the only word that I can see for it] of our farmers’ weak position in the market place.

I truly understand how depressed, fed up and disillusioned so many dairy farmers are at the moment, and there are further problems ahead with farmers facing increased energy and feed bills this winter.

I warmly commend the work that Gwyn Jones and his colleagues have done to drive a new vision for the dairy sector.

On efficiency issues, on innovation and on developing relationships and contracts there is a substantial body of valuable work being undertaken but we need to gain a greater share of the market for value added products such as branded cheeses – currently too much is imported.

But let me know be very frank even if you accept that the dairy industry does have a bright future, it will in truth be the efficient and technically gifted dairy farmers with the potential to take on the better organised and more sophisticated businesses in the wider European Union who are going to prevail.

It is perfectly possible to do this but it will inevitably require a can do rather than a can’t do culture.

Finally, farmers need to go on shouting from the rooftops that they are not manufacturing nuts and bolts – production cannot be turned on or off at the touch of a switch – the onus is on the industry to engage their customers to obtain the security and quality that comes with a UK supply base.

The supermarkets must understand that the farming businesses that make up the supply base must be able to be profitable. Corporate social responsibility should extend to buying commodities.

Absolutely finally! On a very important general point the Government must recognise that in a very difficult and dangerous world in which we live food security and energy security are of absolute paramount importance. It would be completely made to further downside British agriculture.

This campaign has been a triumph in raising people’s awareness on a vitally broader canvass on the absolute requirement for greater transparency and fairness throughout the dairy supply chain.

The All Party Parliamentary Group for Dairy Farmers ,which incidentally is the biggest APPG in Parliament with more than 80 Members and Peers of all Parties, is dedicated to working with the industry to try and get all this right.

The WI has started an unstoppable campaign, whatever our views, wherever we sit we need to get behind it.