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The Milk Marketing Board of England and Wales was established in 1933 to administer the Milk Marketing Scheme in England and Wales. A producer run organisation, it acted as a statutory buyer of milk from producers and as selling agents to processors, manufacturers and distributors of dairy products. It ended in 1994 when the milk market in the United Kingdom was deregulated and replaced by a farmer-owned co-operative, Milk Marque, which later split into three independent organisation following a critical report by the Competition Commission.

Contents

[edit] Key events

[edit] Before World War I

Before World War I, the milk industry in the United Kingdom operated in a free market without government control or protection.[1]

In 1916, in response to bad harvests and increased shipping loss during the War, a Minister of Food Control was appointed with the powers to regulate the supply and consumption of food.[2] All essential food stuffs were bought at fixed prices, which created financial stability for farmers.[2]

In 1920, controls were removed and milk prices rose to two shillings and sixpence a gallon.[3]

[edit] 1920 Following First World War, agricultural prices collapsed

However, a depression in 1921 led to milk prices dropping to fourpence a gallon.[3] These low prices lead to the setting up of the Permanent Joint Milk Committee with representatives of trade and the National Farmers Union representing producers, a first attempt in the United Kingdom at reaching collective agreements on milk prices.[3] Prices were negotiated annually; however, negotiations become more difficult in the late 1920s and early 1930s when agreement was not reached.[3]

[edit] 1920 Linlithgow Committee reported on the need for better marketing

Following publication of the Linlithgow Report in 1924, a first attempt at drafting legislation, the Agricultural Marketing Act, that provided for the setting of a Marketing Board for any commodity, subject to a substantial majority of producers being in favour, was made.[3]

[edit] 1923 Permanent Joint Committee set up, comprising representatives of the NFU and distributors

[edit] 1929 Great Depression brought fall in dairy product prices

[edit] 1929 Demise of Permanent Joint Committee

[edit] 1931 Agricultural Marketing Act. Introduced the concept of producer controlled marketing schemes with compulsory membership

At this time, Governments sought to introduce measures to support domestic agriculture and safeguard farmers' income in a time of depression. Among these was organising producers into co-operative marketing associations.[4] The Agricultural Marketing Act 1931 aimed to secure more efficient and economical marketing performance and to improve producers' bargaining power with large-scale pocessors and distributors. It was the first statutory basis for Agricultural Marketing Schemes and established the principle whereby a majority of producers could compel a minority to observe regulations governing the sale of a particular product.[5]

[edit] 1932 Griggs Commission set up at request of NFU and proposes a milk marketing scheme linked to a Joint Milk Council

The National Farmers Union at its Annual General Meeting in early 1932 voted to request an enquiry to look into the formation of a scheme of milk and the Grigg Commission was set up to prepare schemes for the re-organisation of the dairy industry. Following the publication of the report of the Grigg Comission in February 1933, the National Farmers Union submitted a scheme under the Agricultural Marketing Act and in 1933, the milk marketing scheme was established to be administered by a Milk Marketing Board.[6][7]

[edit] 1933 The Milk Marketing Scheme was introduced

Under the Milk Scheme, England and Wales were divided into eleven regions administered by regional committees comprising of representatives elected by producers. Although the Grigg Commission had envisaged a national milk pool, regional pools were adopted in the scheme. All farmers in a given region received the same price for their milk from the Board though prices varied between regions. The Government guaranteed a minimum price of sixpence a gallon and fivepence in summer, subsidising the industry by £1 million in the first year. This provided an assured market for milk, which, combined with a depression in the livestock industry, led to an increase in milk production in England and Wales from 55 million gallons a month in autumn 1933 to 91 million gallons a month in May 1935 as farmers switched to milk production. The volume became so great that there was talk of restricting production. Instead the Milk Marketing Board advertised and promoted milk and as a result the Board sold 100 million gallons of liquid milk more in 1938 than it had sold in the first year of the scheme.[8]

The Agricultural Acts of the 1930s were designed to combat the instability in the wake of the great depression. In 1933 the Milk Marketing Boards were created under these Acts to give security to milk producers.[9]

Agriculture Act 1933[10]

Milk marketing scheme in operation in 1933.[10]

There were five Boards - the Milk Marketing Board of England and Wales, the Scottish Milk Marketing Board, the Aberdeen and District Milk Marketing Board, North of Scotland Marketing Board and Northern Ireland Marketing Board.[11]

The Board were able to fix the price the dairy trade paid for all milk until prices were prescribed by the Ministry of Food during World War II.[12]All milk was bought by the Ministry of Food during the war through the agency of the Milk Marketing Board, and the ministry enforced economies in retail distribution.[13]

The Milk Marketing Boards [in 1993] acted as the unique selling agents to the 'buyers' of milk, the processors, manufacturers and distributors of dairy products, who were represented by their own organisations: the Dairy Industry Federation, the Scottish Dairy Industry Federation and the Northern Ireland Dairy Industry Federation. The price of all milk sold by the Boards were sold subject to negotiation at a Joint Committee, comprising representatives of the Baord and of buyers of milk in that area. Milk produced outside the area covered by the milk marketing schemes were subject to direct negotiation between producer and the buyer.[14]

[edit] 1934 Aspatria creamery established

[edit] 1935 Cutforth Commission set up and proposes a commodity commission

[edit] 1935 Poll of producers on whether the Board should be wound up fails

[edit] 1940 Ministry of Food established with MMB acting as its agency on milk

[edit] 1942 MMB became direct purchaser of milk from producers and controlled ex-farm transportation

[edit] 1942 National Milk Records introduced

[edit] 1943 Use of artificial insemination organised

[edit] 1947 Agriculture Act. Provided guarantees of prices and assurances of markets

Agriculture Act 1947 passed with the aimed of promoting and maintaining, by provision of guaranteed prices and assured markets, a stable and efficient agricultural industry at minimum prices consistent with proper renumeration and living conditions.[10]

[edit] 1947 Lucas Committee reviewed operation of Agricultural Marketing Acts and recommends a commodity commission

[edit] 1953 End of food rationing, decontrol and re-establishment of free markets

[edit] 1953 Government proposed restoration of Board

[edit] 1954 MMBs re-established. Controls over milk remained

[edit] 1954 National Milk Publicity Council reformed

[edit] 1954 Butter Information Council formed

[edit] 1954 Consultancy service introduced

[edit] 1956 Cheese Bureau formed

[edit] 1958 MMB Sales Division established

[edit] 1962 Import regulation of butter introduced

[edit] 1962 Thorold Committee reported on remuneration of milk distributors

[edit] 1970 Country Life butter launched

[edit] 1973 UK joined EU

[edit] 1973–78 Five year transitional period

[edit] 1978 UK guaranteed price system ended

[edit] 1978 CATFI introduced

[edit] 1979 MMB acquires 16 Unigate factories

[edit] 1982 MMB completes six central testing laboratories

[edit] 1982 EU Commission took court action against UK Government and An Bord Bainne against the MMB on butter and skim powder pricing. Both won

[edit] 1983 Government price control and subsidies on liquid milk ended

[edit] 1984 EU milk quota regime introduced

[edit] 1986 Board successfully takes legal action against producer-processor to retain control over sale of milk ex-farm

[edit] 1987 Dairy Crest became a separate unit

[edit] 1991 Minister of Agriculture demands a review of the Milk Marketing Scheme

[edit] 1992 MMB produces Towards New World, a proposal for a voluntary cooperative with Dairy Crest

[edit] 1993 Agriculture Act. Provided for the revocation of the Milk Marketing Scheme

The termination of the five statutory Milk Marketing Boards (MMBs) operating in England and Wales, Scotland and Northern Ireland was provided for by the Agriculture Act 1993.[15]

[edit] 1993 MMB submitted a Scheme of Reorganisation

[edit] 1994 Milk Marketing Scheme revoked on 1994-11-01

[edit] 1994 Milk Marque established. Genus launched as a company. Residuary MMB established. National Milk Records to be a member controlled organisation. Milk Development Council established

The Milk Marketing Board of England and Wales was replaced in 1994 by Milk Marque, a farmer-owned milk producer co-operatives.[16]

[edit] 1996 Residuary Board launches Dairy Crest onto stock market

[edit] 1996 Director General of Fair Trading requested that Milk Marque made changes to its milk selling system to meet concerns about aspects of its operation

[edit] 1998 Director General of Fair Trading asked the Monopolies and Mergers Commission to investigate the supply of raw milk in Great Britain

[edit] 1999 Monopolies and Mergers Commission (MMC) reports on supply of raw cows’ milk in Great Britain

[edit] 2000 Milk Marque voluntarily replaced by three successor organisations trading independently from 2000-04-01

In 1999, Milk Marque announced that it would split itself into three independent organisations.[17]

[edit] List of potential sources