“Specifically on the GCA, something we have established, it is time to make sure that that organisation has the power, if necessary, to levy fines so that it can get its will obeyed,” said Cameron during prime minister’s question time at the House of Commons on January 21.
“I also think it is time to look at whether there are ways in which its remit can be extended to make sure it looks at more of this vital industry.”
He was responding to a query from Conservative MP for Montgomeryshire Glyn Davies on how the government could stabilise the UK’s struggling dairy industry and whether greater GCA powers would help.
Drop in worldwide demand
Dairy farmers have faced deep and rapid drops in milk price in the past six months, following a drop in worldwide demand, a Russian trade ban, and international oversupply following high 2013 milk prices.
“This is an important industry for our country and I think there are a number of things we can do,” said Cameron. “First, make sure that Her Majesty’s Revenue and Customs is prepared to provide the time to pay to support our dairy farmers.
“There is more we can do in terms of leading exports for British food producers—I know the secretary of state is very keen on that,” he added.
His comments followed the publication of the Environment, Food and Rural Affairs (EFRA) Committee’s Dairy Prices report on January 20.
It called for Tacon’s jurisdiction to be widened to include complaints involving smaller producers, arguing that these measures would help protect dairy farmers from unfair pressure from retailers.
Committee chairwoman Anne McIntosh said: “The GCA can only investigate complaints involving direct suppliers to the big 10 supermarkets and retailers, and as most milk production is small-scale, that excludes most dairy farmers. The EFRA committee thought that was wrong when the GCA was set up in 2013, and events since then justify our view that her remit should be extended to include small-scale suppliers …”
The report also urged the government to quickly activate Tacon’s power to fine retailers for breaching the Grocery Supply Code of Practice.
“We were shocked to learn in evidence that the government has spent more than a year failing to set the level of fine the GCA can seek when she finds against a retailer,” said McIntosh. “This leaves her unable to use her main power, and we call on the government to set that fine immediately, and before the General Election in May.”
In its report, the committee seeks an EU-wide review of the milk intervention price and calls on farmers to consider forming producer organisations to increase their market clout.
The report also calls on the government to help dairy producers tap more worldwide export opportunities, press for clearer ‘country-of-origin’ labelling on products and improve codes regulating dairy industry pricing and operations.
Dr Judith Bryans, ceo of trade body Dairy UK, welcomed the EFRA Committee’s recommendations for the government to encourage the industry’s export potential. She also praised its recognition that the industry’s voluntary code of practice should not be made compulsory.
However, she said: “We do not believe that extending the powers of the GCA would help to address the challenge of volatility, and contractual relationships between farmers and processors that are already covered by the voluntary code.”
And she added there was scant evidence from other countries that forming producer groups to boost farmers’ power was effective.
Scotland’s rural affairs secretary Richard Lochhead has called for the UK government to ensure the plight of Scotland’s dairy farmers is raised at the EU Agriculture and Fisheries Council meeting on January 26.
Meanwhile, shadow food and farming minister Huw Irranca-Davies told the Oxford Farming Conference earlier this month that serious consideration should be given to the question of granting the GCA wider powers.