May Government: What's Next for Dairy?

The last three weeks have been akin to a wild rollercoaster ride for UK policymakers, with the unforeseen result of the EU referendum followed by a string of unexpected developments within both the Conservative and the Labour parties. As Prime Minister Theresa May puts the final touches to her new Government, Dairy UK Chief Executive Dr Judith Bryans takes a look at top issues for the UK dairy industry.

 Focus on dairy trade

With exports high on the agenda, establishing close collaborations with the new Brexit Secretary and International Trade Secretary will be a top priority. Speaking to the BBC this morning, Mr Fox said the UK had "tremendous opportunities to increase [its] global profile and we should be extraordinarily optimistic and confident about the future."

With considerable uncertainty and challenges in the wake of the referendum and a brand new Government, many are anxious to find out more about Mr Davis's plans for the Brexit negotiations. In an interview with ConservativeHome on Monday, Mr Davis said he was optimistic about the UK's future post-Brexit and believed the UK would remain in the Single Market.shutterstock 247955950 small

"The ideal outcome (and in my view the most likely, after a lot of wrangling) is continued tariff-free access," he said. "Once the European nations realise that we are not going to budge on control of our borders, they will want to talk, in their own interest. There may be some complexities about rules of origin and narrowly-based regulatory compliance for exports into the EU, but that is all manageable."

He also pointed out that should the EU refuse to budge on Single Market access, the UK could support its industry by using income from tariffs on EU imports.

Saying triggering Article 50 should be delayed until the end of 2016 after in-depth consultation with devolved Governments and other stakeholders including trade bodies, he added trade deal negotiations with major partners such as the US or China should start right away, with the aim of concluding them within two years, maybe even before negotiations with the EU are complete. "It should be clear from all this that Brexit favours an export-based growth strategy, and that should be what we embrace," he said.

Dr Bryans made it clear that trade was a core element of the industry's future. "The UK dairy industry has tremendous potential for growth on the global stage," she said, "and the Government must provide the right framework to help make our sector more resilient, competitive and profitable.

"With so many opportunities for new markets arising across the world, the Government must act swiftly to conclude free-trade agreements with major partners lest we get left out of the global game. And it goes without saying that we must have continued access to the EU market, our main trading partner. We will need robust trade agreements which remove tariff and non-tariff barriers to allow us to take our place in the global market and be a strong and credible competitor."

A level playing field for food and farming

The dairy industry will expect newly appointed Defra Secretary of State Andrea Leadsom to work around the clock to protect the interests of the food and farming sector, both at domestic level and within the scope of the Brexit negotiations.

The broad outlines of the Conservative Party's policy on agriculture have been relatively constant over the past few years favouring greater market orientation and a reduction in subsidies and market support; linking the provision of support to the provision of public goods by farmers; and a science based approach to the approval of new technologies.

However, in the absence of the framework provided by the CAP, the UK Government will have to determine the amount of resources to be allocated to food and farming as well as whether to continue or phase out income payments, and if the latter, over what timescale.

"With volatility now an inherent part of the market, the dairy industry must focus on being more competitive and finding the right tools to manage the impact of volatility", Dr Bryans explained. "It will be essential for Andrea Leadsom to keep working closely with the industry to help drive it forward and build an environment which facilitates growth and development and reduces the burden of regulation.

"The dairy industry has serious challenges ahead but also many opportunities and we ask Mrs Leadsom and her team to ensure a smooth and seamless transition for our industry throughout the Brexit negotiations. There is much at stake and we count on Defra's support to foster growth and success in our great UK dairy industry."

Given the tremendous impact of the European Union on food and drink legislation, the new Government will also have to provide a level playing field with fair regulations on par with competitors abroad.

Putting dairy foods front and centre

Relationships between the dairy industry and the Department of Health and its agencies have been fraught with tension over the last three years, with several campaigns circulating negative messages about dairy products. The recent Eatwell Guide debacle coupled with the misleading Sugar App added fuel to the fire and generated significant anger, especially at a time when Defra and other Government agencies called for industry growth and development.shutterstock 274846961 small

Nevertheless, as Jeremy Hunt stays at the helm of Richmond House, the dairy industry is hoping for a fresh start and renewed discussions on the role of dairy in public health.

Dr Bryans reiterated the industry's commitment to driving home the health messages. "Everything we do, every day, is underpinned by the simple message that dairy products have a crucial role to play as part of a healthy and balanced diet and lifestyle," she pointed out. "We say it, Defra and the Dairy APPG say it, and an ever growing list of countries and members of the scientific community say it. Yet in the UK, we have had to fight our own health authorities almost daily as they ignore the science highlighting the benefits of dairy.

"We sincerely hope that the momentous changes in the UK's political life can be an opportunity to start afresh and build constructive exchanges with the Department of Health to put dairy foods front and centre in the public health debate."

A skilled workforce for dairy

So far, the Government has declined to address directly the question of EU workers living in the UK.
Dairy UK is surveying members to get a clear picture of the proportion and the role of the European workforce in dairy processing and manufacturing. "The UK dairy industry from farm to fridge benefits from the free movement of non-UK born EU labour," said Dr Bryans. "Access to a skilled workforce is crucial for our industry to remain competitive and must be a top priority in any Brexit negotiations."

Bright future for dairy

Dr Bryans concluded by saying that regardless of the political context, the industry's main duty was to consumers. "The UK dairy industry is adaptable, resilient and determined," she said, "with the skills and innovation to rise to the many challenges we encounter. We operate in a global dairy marketplace and we will keep showing our unwavering commitment to give the public nothing but the best of UK dairy. We will continue to liaise with the UK Government, devolved administrations and all relevant organisations to promote the interests of the UK dairy sector and help to steer our industry in the right direction."

Categories: 2016

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