Defra has launched a consultation on dairy producer organisations and published details on how dairy farmers can apply for a £5m development fund.
The six-week consultation forms part of the government’s efforts to implement the EU dairy package in England, with separate consultations to be carried out in Scotland, Wales and Northern Ireland. Producer organisations (POs) would allow farmers who are not already part of a co-operative to collaborate on selling milk to processors.
Farming minister David Heath said better industry collaboration was key in order for the dairy industry to fulfil its potential. “We’ve already got the industry code of practice, and negotiating as groups rather than individuals will give dairy farmers an even louder voice to get their just rewards from the market place,” he added.
Questions covered by the Defra consultation include whether there should be a minimum of 10 farmers per producer organisation, producing at least six million litres a year. The department also makes clear its preference for not making contracts between processors and farmers compulsory at this stage, and allowing the voluntary dairy code of practice – which was agreed at the end of this summer – time to bed in.
NFU chief dairy adviser Rob Newbery welcomed the consultation and said there had already been strong interest in POs from NFU members. He added the NFU would stress in its response to Defra the need to keep POs open to all farmers and not impose restrictions, such as by specifying a minimum number of farmers per PO.
Dairy UK director-general Jim Begg said he was pleased to see Defra was willing to give the voluntary code of practice time and avoid regulation. He added POs could potentially provide a new opportunity for farmers to market their milk collectively. ““We will seek to co-operate with Defra and the industry to progress collaborative work in this area so that those Producer Organisations that do emerge are viable and can make a positive contribution to the supply chain,” Begg said.
The dairy £5m package of grants for dairy farmers – which was first announced by former farming minister Jim Paice over the summer – will allow farmer to apply for grants of at least £25,000 to support new farmers groups.
Defra said the grants could be used “to establish new cooperation structures, such as producer groups and cooperatives, and invest in technology to take advantage of new market opportunities”.
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