Minister says new law may be needed to protect dairy farmers

Monday 23 July 2012

Scotland's Environment Secretary has said legislation should be considered to prevent dairy farmers being abused by powerful retailers and producers.

Dairy farmers complain that the money they are paid for milk does not cover their production costs, a situation Richard Lochhead described as "unsustainable".

He is meeting environment ministers from the UK administrations at The Royal Welsh Agricultural Society Show in Powys today to devise a code of practice to rebalance the relationship between farmers, producers and retailers.

If the code is unsuccessful, he told BBC Radio Scotland's Good Morning Scotland programme that legislation should be considered to protect farmers from large retailers and producers who "abuse" their power in the market.He said: "I had meetings with environment ministers from across the UK last night and the position I took was that we need a robust code of practice which is hopefully going to be negotiated today at the show and put in place as soon as possible to help rebalance what is a very unbalanced supply chain at the moment where the dairy farmer is getting a very raw deal."If that doesn't work and we can't reach an agreement today at the show then all of the administrations - the UK Government, the Scottish Government and the Welsh Government - should all be looking at legislation to try and get some fairness into the arrangements between the dairy farmers, the processors and the retailers."He added: "Ministers can't set the price of milk but what they can do is try and legislate for a fair environment for the supply chain, whether it's for the dairy farmers, the processors and of course the retailers are very powerful within that at the moment."He said dairy farmers "are getting the rawest deal of everyone in the supply chain" and "are being squeezed by the competition between the retailers and milk processors"."Most consumers would think it's unfair that the retailers are discounting the price of milk on their supermarket shelves to try and attract footfall because of the cut-throat competition between the retailers," said Mr Lochhead."We have to give them (the farmers) protection because otherwise the supermarkets, and the processors in this case are huge organisations, can abuse that power, and that's the whole point of regulation to try and give us a fair environment for people to trade within that."The Scottish Government has already intervened to discourage supermarkets from using alcohol as a loss leader by outlawing multi-purchase deals, and are driving through legislation for a minimum unit price on alcohol.Ministers also recently introduced a public health levy on large retailers of alcohol and tobacco, commonly known as a "Tesco tax" for its overwhelming impact on large supermarkets.

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Minister says new law may be needed to protect dairy farmers

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