25 June 2008

2 minute read

Europe

NFU Dairy Board chairman Gwyn Jones welcomed Marks and Spencer's announcement of a bonus for its dairy farmers to help them make the investments needed to comply with the programme but said other retailers and milk buyers needed to show the same commitment.

Mr Jones said: "M&S has shown clear leadership and its decision represents an important contribution to the cost of meeting NVZ requirements. However, the total estimated costs per farm are over £50,000 and further response from Government and the supply chain is necessary to meet this challenge.

"Many dairy farmers are waiting to hear what the proposals contain before making the decision to invest or quit the industry. At the end of last year, with increasing farmgate milk prices providing a much needed boost to margins and confidence, there was more buoyancy among farmers about facing the challenges ahead," he said.

"However, against a backdrop of rapidly rising production costs, farmers can no longer rely on higher milk prices providing a more comfortable and stable financial situation and, as a result, the courage to plan ahead for the immense investment on farm necessary to comply with the NVZ proposals is wilting."

Mr Jones said establishing direct relationships with farmers, as advocated in the NFU's Vision for the Dairy Industry, enabled retailers to better understand the pressures and challenges their producers face and put them in a stronger position to respond. M&S's announcement demonstrated the strengths of these dedicated supply chains.

"We are still awaiting Defra's decision on the consultation, but farmers clearly need time and money to make the necessary investments. NVZs represent one of the major issues contributing to fragile confidence in the dairy industry and will restrict the ability of farmers to expand production," Mr Jones said.

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