Alistair McConnachie Sovereignty WHY THE BRITISH DAIRY INDUSTRY IS SUFFERING

Alistair McConnachie published Sovereignty from July 1999 to its 120th consecutive monthly issue in June 2009, and he continues to maintain this website.
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WHY THE BRITISH DAIRY INDUSTRY IS SUFFERING

Alistair McConnachie writes:

Dairy farmers in Britain are suffering a collapse in milk prices by up to 5p a litre, which is well below the cost of production. Yet, dairy farmers in Ireland, and among our European competitors, are able to make a living producing far less milk than the average British dairy farmer. Why is this?

There are 4 reasons:

Firstly, the milk price for all milk in the EU, including the milk produced in Britain, is set in euros. British farmers are paid the equivalent euro-value for their milk. Therefore, when the euro devalues in relation to sterling -- which means that the euro is "weak" in relation to the "strong" pound, which means that you get more euros for your pounds -- therefore, when British farmers get paid in euros, and convert these euros into sterling, they find they get less sterling.

In effect, this means that farmers in euroland start at around a 15 percent price advantage compared to British farmers. Even if Britain joined the euro, we would have to join at the current exchange rate, and so the present disadvantage would remain.

Secondly, due to the milk quota system set by Brussels, euroland farmers have surpluses, which, because the "Common Agricultural Policy" allows free access to British markets, they are able to offload onto Britain and thereby undercut home producers.

Thirdly, our euroland competitors are supported better financially by their own governments, via various subsidies and tax breaks. Yet, here in Britain, our government seems determined to do away with much of British farming, and to see small and family farms driven to the wall.

Fourthly, British taxpayers pay £5 billion a year into the Common Agricultural Policy but only £2.2 billion comes back to British agriculture. In other words, for every £1 we pay to help British farmers, we pay £1.50 to help our European competitors.

In other words, we British taxpayers are paying European farmers to undercut our own British farmers!

Below :
Dairy farmer David Goddard (right) made a couple of policy suggestions in his letter to Laurence Robertson MP, which was circulated via the internet on 28th June 2002.

Dear Laurence

The EU is a mad house -- please can your party get us out!

I cannot produce 1 million litres of milk a year profitably at 16p/ltr or even 22p. Farmers in other EU countries are making more money from herds producing no more than 200,000 litres a year!

Our price could fall yet again if the Government continues to do nothing to stop the practise of importing cheap food products, which are being imported for less than our cost of production, because our Government is subsidising other EU farmers to produce it - whilst denying British farmers many of the same subsidies.

The madness compounds itself as British farmers start to put UK milk into intervention whereupon the British taxpayer will have to pay again to support the process.

Two things need doing NOW:

1. Make it illegal for a supermarket to sell food and milk below the cost of local production -- as do the French and Germans.

2. Enact a law requiring supermarkets to sell at least 25% local food, preferably sourced within the County to encourage the supply of locally grown and processed food -- as do the French (and USA?). I would love to get a contract to supply my local Tesco supermarket with my own brand of milk. The customers could even come along to see the cows being milked.

This will give the public what they are telling you they want and provide more choice for the consumer to the bargain.

The alternative is a total loss of UK farmers, forced out of business by cheap foreign food of dubious quality, which has been produced at the expense of the British taxpayer.

The matter is critical. Please could you forward this to the Minister responsible for the demise of British Agriculture and ask if she can give me a reason why my suggestions should not be acted upon as a matter of urgency.

Other EU countries can and do take measures to encourage local production, reduce food miles and provide better quality food in their supermarkets.

Time is running out for UK farmers.

David Goddard
Gloucestershire.