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Dairy-sector action plan launched at Baldoukie

Dairy-sector action plan launched at Baldoukie

Cabinet secretary Richard Lochhead was in Angus to announce a new Dairy Action Plan aimed at improving the fortunes of the troubled sector.

To observers of the scene it may appear that dairy initiatives arrive with baffling frequency, but Mr Lochhead was at pains to point out that this action plan is designed to bring a number of these “workstreams” together and help point the way ahead.

He also set a timeline from now to the end of the year for various steps to be made, including greater retail engagement; new, specifically Scottish branding; and seeking to encourage investment in processing.

None of these will be easy, but are a first step in taking forward the Ambition 2025 report prepared by Scotland Food and Drink chief executive James Withers and the Dairy Growth Board chaired by Angus businessman Paul Grant.

Speaking at Taylors of Baldoukie near Tannadice, Mr Lochhead said he was aware that the dairy sector generated £400 million of output from more than 900 dairy farms. It amounted to 15% of Scottish farm output and provided work for 2,000 people in the processing sector.

Analysing the present position of price volatility and poor returns to farmers Mr Lochhead said: “The causes are twofold: world supply and demand is out of balance for a variety of geopolitical reasons; and the profile of milk and dairy products on the home market has been devalued as they have been used as loss leaders to gain market share.

“But I think if we can work with processors and retailers we will find there are great opportunities in the domestic market.”

These would partly come from import substitution, but there were also good export prospects ripe for exploitation.

A key component would be the launch of a Scottish dairy brand, but this was not planned until the Anuga Food Fair in October.

“I have spoken to a manufacturer who tells me that his cheese would sell at three times the UK shelf price if he could place it on European shelves,” said Mr Lochhead.

Domestic consumption could be increased by targeting public procurement and the high-volume food service sector,

There is, however, urgent work needed to support troubled Scottish-based cooperative First Milk, and especially its members in remote areas without alternative markets.

These steps would include providing support for First Milk’s revised capital investment plans for the Campbelltown creamery, and reviewing freight charges on the ferries serving areas such as Bute.

In June Mr Lochhead expects to be discussing the next steps forward for the industry’s voluntary code of practice, and by July he is to engage with Grocery Code Adjudicator Christine Tacon to see how she can best support the dairy sector.

In all, he has set himself an ambitious eight-month programme with some tough nuts to crack.

It was perhaps surprising on Tuesday that he was on his own. Paul Grant and James Withers might have been expected to be at his side presenting a united front.

NFU Scotland can be excused for not being represented because of a clash with a milk committee meeting, but the organisation did welcome the Dairy Action Plan while also urging quick implementation.