Outlook: Farming fun

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The Independent Online
MORE FUN and games down on the farm. Dairy farmers this week voted to break Milk Marque up into three separate co-operatives. This was quite a turn up for the books, given that earlier this year, Stephen Byers, the Trade and Industry Secretary, had spent many months agonising over a Monopolies and Mergers Commission report which had recommended precisely this. In the end he chickened out, and in a move politically designed to appease the countryside lobby, overturned the MMC's findings. The MMC's approach was just too radical, he seemed to say; the poor little dairy farmer gets a raw enough deal as it is, without this to cope with on top. In doing so, he seemed to agree with the National Union of Farmers that farming shouldn't be subject to the usual rules of competition at all, but instead should be a protected industry for ever set in aspic.

However, the diary farmers didn't get quite everything they wanted. Besides maintaining Milk Marque's effective monopoly of milk distribution, they also wanted the co-operative to be allowed to expand further down the value chain into milk processing, making nationally distributed cheese and yoghurt. This was disallowed. But there's no use crying over spilt milk, and the farmers have now sensibly decided they got the wrong end of the trade off; the right to make yoghurt is worth more than the monopoly. All in all, Mr Byers must be feeling rather pleased with the outcome. He's achieved the result the competition authorities wanted all along, but without being seen to coerce the farmers into it.

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