Forum must tackle dairy crisis

This call was prompted by concerns that there is no clear signs global dairy prices will improve in the near future.

“There is a real need to see this as an industry problem, rather than an issue for farmers alone,” said UFU president, Ian Marshall. He said there had been some criticism that the supply chain forum had met only once – but that the crisis facing the dairy industry was an opportunity to show that the decision to create the forum was worthwhile.

“There is no magic bullet to solve this crisis – but the industry needs to work together to help farmers survive. We need to know more about the market and why markets are not responding. More importantly as an industry we need to develop a strategy that is now, quite literally, about survival for many farming families,” he added.

The UFU says it has been leading the dairy lobby from the outset here, in London and in Brussels.

“We have been pressing for higher prices and more support, but realistically the industry has to come up with a plan to help itself,” said Mr Marshall. He said that through a winter when cash flow pressures are acute the UFU had been engaged with the banks over issues such as extending loans, capital holidays and re-financing in extreme cases, successfully getting the income average threshold increased from two to five years as well as ensuring the maximum number of single farm payment payments were issued as early as possible.

“It is however important now that we move from fire-fighting and come up with a plan – a tool-box of measures – to help ourselves survive and to make sure that when prices finally improve that we do not fall back into the same boom and bust trap,” said Mr Marshall.

In the short term the UFU says it will continue working with dairy processors and will maintain pressure on supermarkets over prices, while continuing to work with the banks and the supply industry to help farmers cope with the cash flow pressures they are under.

“Beyond that we need radical thinking. We need to come up with ways to take the volatility out of the industry and to put borrowing by farmers on a longer term basis. We need to think about supply contracts with processors, price insurance and futures trading. Above all we can no longer shy away from radical thinking,” said Mr Marshall.

He added that the dairy players within the supply chain forum are best placed to bring the focus needed to these discussions.

“It is for this reason that I am urging the minister to use the forum she created, and to prove that it is more than a talking shop and a substitute for the real action the industry needs,” said the UFU president.