Written question asked by Baroness Byford (Conservative), in the House of Lords. It was answered by Lord Taylor of Holbeach (Conservative) on Monday, 7 November 2011.

Agriculture: Dairy Farms

Question: To ask Her Majesty’s Government what assessment they have made of the reasons for British dairy farmers receiving the lowest prices for milk within the European Price League Table.

Answer: British milk producers receive a range of prices for their milk. Those aligned to individual retailers for the supply of fresh drinking milk generally receive the best prices. Non-aligned producers supplying for other markets such as dairy products generally receive lower prices. The farmgate milk price in the UK and other countries depends on the market price transmission through the supply chains for these products in each country. Historically, UK farmers have received a lower milk price than the majority of their counterparts in Europe. This raises questions as to how the UK dairy supply chain works, the competitiveness of processing in the UK and the product mix for dairy. The Government, through the Dairy Supply Chain Forum, are challenging senior sector representatives to discuss the health and future of the dairy sector and identify opportunities that should benefit dairy farmers. These include exploring new export markets or replacing imports with products made with British milk to improve our trade balance and therefore demand for British milk supplies. We have encouraged and supported the industry's development of its own voluntary code of practice on contractual relations for farmers, and the Dairy 2020 project will produce an action plan to secure long-term industry sustainability.

Secondary information