PROFITABLE MARKET-DRIVEN DAIRY INDUSTRY
WILL EMERGE AFTER CAP REFORM
A demand-driven dairy industry offering UK farmers a more prosperous future
will emerge from the latest phase of CAP reform, according to Express Milk
Partnership (EMP) chairman Jonathan Ovens.
Speaking at the organisations ninth AGM on 13 November in response to a
presentation by DEFRA's Andrew Slade on CAP reform, Mr Ovens accepted that
significant rationalisation was inevitable as price support is withdrawn,
but predicted market-led premiums beyond the period of reform that would
make dairy farming viable for those supplying high value markets.
"The removal of price support is set to reduce what we currently know as
IMPE by around 4.5ppl whereas the best current estimate on the value of the
Single Farm Payment is 2.5ppl," he pointed out. "This means that farmers
supplying the commodity sector of the milk market will suffer a price
reduction that is likely to be unsustainable and many will be forced to
cease milk production. We expect to see the fresh liquid and higher value
processed product markets become demand-driven by around 2008, as a
consequence, and that should result in price premiums sufficient to support
progressive businesses.
"In the short term, dairy farmers and the wider industry need to be dealt a
fair hand and require a swift and decisive resolution to this latest phase
of reform. This must mean that the Single Farm Payment is based on
historical entitlement for dairy farmers and decoupling is introduced at the
earliest opportunity. This will be a painful exercise for the industry as a
whole, but will give farms the best chance to adapt and provide continuity
of supply to the market."
The EMP AGM saw the re-elections of Jonathan Ovens as chairman and Wesley
Abbey as vice chairman. The organisation, which represents around 900 dairy
farmers from across the UK, is building on the successful relationship with
its long term processing partner - now Arla Foods UK plc following the
recent merger of Express Dairies with Arla Foods plc.
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