Elizabeth Truss calls for discussions on long-term contracts to protect farmers from milk price volatility and retailers having to put origin on packaging

This article is more than 5 years old

This article is more than 5 years old

The government could force supermarkets to state on labels whether their fresh food is from Britain and to agree to long-term contracts with farmers as part of plans to address the crisis in the dairy industry.



Elizabeth Truss, the environment secretary, said an emergency meeting between ministers and farming leaders on Monday was encouraging.

The talks were arranged after the National Farmers Union (NFU) warned there was a state of emergency in farming due to a 25% fall in the farmgate price of milk in the past year.

Aldi, Lidl, Asda and Morrisons agreed last week to increase the amount they pay for milk after farmers blockaded distribution centres and brought cows into supermarkets in protest at the price they were receiving.

Tesco, Britain’s biggest retailer, will hold talks with campaigners on Tuesday after protests about the amount of milk it is importing from outside the country for use in cheese, yoghurts and other dairy products.

Truss claimed that less than half the butter and cheese eaten in Britain is made from British milk and called on retailers to clearly label where their product was sourced so customers know what they are buying.

She said: “I want to see better branding and clearer labelling of dairy products in supermarkets, retailers and throughout the catering industry so that people know when they are buying British, and we have agreed to have further discussions with the food industry on this.”

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Meurig Raymond, the NFU president, said a many farms are on the brink of closure but the latest meeting showed the government recognised the scale of the problem.

He said: “The most important thing was a recognition of the crisis and that the supply chain needs to work better so that farmers are not the only ones carrying the risk at times of volatility [in milk prices].

“Cashflow is very tough. Farmers will be making decisions in the next two months. We need to get more money to farmers before they make a decision to leave.”

Raymond said it was debatable whether laws could be introduced that forced retailers to state on packaging where their food had been sourced. But he said the Groceries Code Adjudicator, the supermarket watchdog, has a role to play.

As well as calling for changes in packaging, farmers want retailers to agree to longer-term supply contracts that protect them from sharp movements in commodity prices.

Truss has agreed to create a new working group to discuss how contracts can be overhauled. At a meeting of European agriculture ministers next month, she will also push for the creation of a new futures and insurance market in dairy products that could shield farmers from fluctuations in prices.

She said: “It was an encouraging meeting and I believe we can help build stronger foundations that give the industry the long-term stability and commercial opportunities it needs to manage global volatility.

“I recognise the seriousness of the current situation for the dairy industry and for farming as a whole. Our hardworking farmers and the £100bn food and farming industry are vital for our economy and our countryside.

“It is in everyone’s interest that supermarkets, caterers and the food industry have a secure supply of milk. That’s why I am pleased to see some supermarkets share the risk with farmers over price fluctuations. We are urgently setting up a new working group with the UK farming ministers and the Agriculture and Horticulture Development Board to develop best-practice models with the industry.”

Tesco’s agreement to hold talks with farmers came after campaigners blockaded distribution centres at Avonmouth and Widnes on Sunday to protest against the supermarket group’s dairy imports.

Representatives of the campaign group Farmers For Action are to meet with Matt Simister, Tesco’s commercial director for fresh food.

A spokesman for the supermarket said: “We are aware of an incident that took place at our Avonmouth and Widnes depots. There was a limited amount of disruption and the distribution centres are now operating normally.”