Agriculture - Protest over milk pricing
WORKERS, MAR 2007 ISSUE
Dairy farmers dressed as cows and Women's Institute members in milk baths have protested in Downing Street against low producer milk prices. They want government protection from "unfair" practices by supermarkets. The decline in the dairy sector is closely linked to the EU Common Agricultural Policy (CAP).
Over 10 years 15,000 dairy farms have stopped production. The remaining 20,000 are run at an average loss of 3p a litre of milk. Retail prices have risen from 42p to 51p a litre over that period, yet the price paid to farmers is down from 25p to 19p. This is amongst the lowest in Europe.
The Competition Commission has announced an investigation into the buying power of supermarkets. The environment secretary, David Milliband, appealed to farmers to cooperate. This may not be the answer farmers want.
The Department for Environment, Food and Rural Affairs says that milk prices are a commercial matter for companies and their suppliers: the government cannot and should not get involved in price negotiations as long as competition rules are respected.
The 2003 CAP reforms, which the government also supports, cut subsidy to the dairy sector and opened up competition. It's no surprise that supermarkets have taken advantage to drive down prices and increase profits. That's what the single market is about. Increasing efficiency and investment are secondary, as Britain's farmers are discovering.