 o unidwyddiol yn ei wath i gyda'u ddeblogaeth yr argynwys i fod yn gweithdoedd. Thank you for that end's-topical questions. We now move straight to next item of business, which is a debate on motion number 1289 in the name of Rob Gibson on the Dairy District inquiry. Members who wish to take part in the debate should press a request A fost, nid rydw i weithio, mae'n gweithio i chi bod feddwl i bobl yn llei ddingo i gael ffathau aethau, mae'n edrych i ddigleu'r ddigleu eich diweddard不會 arol ar gyflen. A i mi oedd yn agorafodd i'r ddigleu'r ddigleu'r ddigleu'r ddigleu'r ddigleu'r ddigleu'r diweddard hopefoddog o'r ddigleu i gael gwaith o gyffredinol. Efallai yn cymdeithasol i ddod â ddigleu'r ddigleu'r ddigleu, the Rural Affairs Committee climate change and environment committee, Mr Gibson, in around 14 minutes? Thank you very much, Presiding Officer. Last month, the Rural Affairs and Climate Change and Environment Committee held a short snappy inquiry into developing crisis in the Scottish dairy industry, sparked by the announcement by FirstMill that it was to delay payments to its farmers. We heard from a wide range of people, including dairy farmers and some of our more fragile communities, processors, industry bodies, retailers, the UK grocery code adjudicator and the Cabinet Secretary for Rural Affairs, Food and Environment, Richard Lochhead. We then reported our views to the Government. I'm delighted that this has resulted in the committee's points being taken into account in the Scottish Government's dairy action plan, which it published last week. It was unfortunate that there were some well-documented initial reluctance by some of Scotland's biggest supermarkets to appear before us, but I am pleased that, in the end, all nine major retailers in the country came and gave us their very interesting evidence to the committee. We're hopeful that this is a sign that any previously held reluctance to engage in the Scottish Parliament and any soured relationships can now be set aside in favour of more Team Scotland approach, which could benefit all parts of the chain from producers through to consumers. It is time to move forward. It was apparent to us very quickly that there were some very serious challenges facing the dairy sector in Scotland and that urgent action is required if we're going to address those challenges. Globally, the dairy sector is a very volatile market and there's only so much influence that we can have on that in Scotland. However, what we must improve on is the way that we shield the industry from that volatility to enable it to develop and to grow. We heard that there had been a perfect storm of circumstances that had led to the current dairy crisis, which included the Russian import ban on food products from Europe, global good weather in the dairy producing areas and increasing production in advance of the end of the quota system, and a decline in the growth of the Chinese market, leading to a simple economic problem, too much supply and not enough demand. That has impacted on farmers here in Scotland very damagingly, but while we must address the short-term problems, many people who spoke to us felt that there were reasons to believe that the medium-to-long-term outlook was positive. The situation that developed at First Milk was very serious indeed. It was clear to us that some of the decision-making and management within that organisation could be criticised and lessons have to be learned from that to ensure that First Milk does not find itself in this situation in future. First Milk is often the only option for many of our remote and island dairy farmers who are not often in the position of being able to supply retailers directly or other processors such as Graeums, Muller Wiseman or Arla. Those farmers are in some of our most fragile communities who are receiving the lowest prices for their liquid milk. They were also farmers who were left without payment at all at a time in the recent debacle. I was going to say very briefly that it probably does not need to be given the Presiding Officer's earlier remarks. I wonder whether I could use this intervention to highlight the fact that the price drop by First Milk and the structural difficulties to which the convener has referred were exacerbated by a further two-pence deduction from its suppliers to go towards the capital pot that simply exacerbated the difficulties of the producers? Yes, indeed. We will come to some of those points on the dairy chain as we go along, but I am sure that members will explore them in greater detail than time that I have. We heard compelling evidence from a farmer on Gia who has to pour away milk if it cannot be collected and taken to the mainland in time because of bad weather and other circumstances. We must take steps to protect the producers and the communities that support them, and we expect First Milk to do that for them as well as to collect their milk. In our letter to the Government, we focused on finding solutions for the farmers such as those on Gia and set out an eight-point plan for tackling the First Milk issues that the Government has adopted. That involves investment in infrastructure, measures to keep producers in the market, dedicated in-market export resources and a marketing push on all products, improvement in the quality of the management at First Milk, exploring the potential for partnership agreements with local authorities and agencies, examining pension legacy liabilities from the previous milk marketing board, considering the size of First Milk and the opportunities to work with others, and initiating research and development for new products in Scotland to stimulate innovation. I am sure that I speak for the whole committee that we welcome the Government announcement that it will implement this strategy in full. We also called on the Scottish Government to examine options for assisting our island dairy farmers with transport costs. Although I note that there is some comment on this in the dairy action plan, the timescale given to this is by October. I would like to hear from the cabinet secretary on what can be done on this issue now to help to provide support to our island dairy farmers, if possible. Getting to the bottom of the milk churn, so to speak, the liquid milk market became a murky business. What we were clear on was that many producers are being paid a price for their milk, which is less than the cost of production and that the price paid by retailers is a factor in the overall health of the sector. The most recently available data, which ends in 2011, shows that over the last 20 years, we have seen retailers' margins on milk increase from 5 per cent to 35 per cent, while processors' margins have been squeezed from 39 per cent to 16 per cent. Retailers told us that, since 2011, their margins have decreased, but, frustratingly, there is no publicly available data to confirm that. We must improve transparency and pricing. The public and the customers have a right to know what producers are being paid for their products as they make decisions on what to buy. One pound for four pints of milk in many supermarkets is an attractive proposition for customers, but where does that leave the dairy farmer who produced the milk in the first place? We need to know more about the bulk market and the prices paid by the hospitality and public and private procurement sectors, which make up a considerable part of the total. We looked in detail at other measures that could help the industry now and in the future and made recommendations on such matters as support with financial matters, the role of the UK's voluntary code of practice and groceries code, the role of the EU in recommending compulsory contracts and setting intervention prices, and whether establishing more producer organisations in Scotland would help. Again, I am pleased to say that many of those recommendations have made it into the Government's day-reaction plan. Indeed, I noted that the chancellor included one of them in his UK budget recently, allowing tax smoothing over a five-year rather than a two-year period for dairy farmers. Amongst all of that, we were appalled at the list of abhorrent supermarket practices that were alleged by the UK grocery's code adjudicator and described to us in her evidence, which highlighted a breakdown in the collegiate approach that is required between producers, processors, retailers and consumers. We questioned retailers on that, but all those before us seemed to be whiter than milk. They knew nothing, of course, of any of those practices whatsoever. Nevertheless, we urge all major retailers in Scotland to work with the adjudicator to rid Scotland and the rest of the UK of any ethically reprehensible practices. Trust is important in the industry between producers, processors, retailers and consumers. I am grateful, and I am reminded that there are no longer on the Rural Affairs Committee and genuinely missing it, but did the evidence that came to the committee actually endorse the idea that there should be compulsory contracts? That may or may not be a good answer. I think that we explored that with many other issues. The question of how dairy farmers deal with either the wholesalers or the sellers is something that is very mixed, and there is a very mixed picture on that. The question about compulsory contracts is on the table and may be appropriate in some cases. Much of our evidence-taking and subsequent recommendations to the Scottish Government looked at the future and focused on exports, home markets and innovation. We heard that innovation is not happening in the Scottish dairy industry as much as it should be, especially when compared to some other countries, and yet we have potentially good news stories here to produce high-value, distinctively Scottish traditional and new dairy products. Try going into your local supermarkets and finding Scottish dairy products. It can be like trying to find wild haggis. Why are the best-selling dairy products in Scottish shops produced outside Scotland? Our top-selling cheese is produced in England, our most popular butter from Denmark. I suspect that it is because there are more readily available through larger organisations and often at lower prices because of that. Why do many Scottish consumers choose not to buy Scottish yogurts and creams? Well, because either they are not produced or not being pushed hard enough in our shops. We need to help people to buy Scottish and we have to develop the export market and, of course, we must also challenge patterns of sales right here in Scotland. What better year to inject fresh impetus into that than this year, the year of Scottish food and drink? There are great products—butter, cheese, yogurt, cream—to innovate new products such as bio drinks, puddings and children's snack products. We also need to look at the way we label products. If they are to be labelled as Scottish, then that must mean that they are made from Scottish milk, not made in Scotland using milk from elsewhere or indeed Scottish milk being used in other countries and then labelled as Scottish when we do not get the added value. The cabinet secretary told us that a new Scottish dairy brand was being worked on at the moment and would be launched later this year. At the Scottish dairy plant, he gave some more information on that. It sounds like an exciting development and opportunity for the industry, but I am sure that everyone here today would welcome further information on that from the cabinet secretary later in this debate. If we are to realise that all of our ambitions, including making the most of any new Scottish dairy brand, then it is essential that Scotland has both the right environment to stimulate innovation and investment in the processing capacity that we have to deliver those innovations. We must not forget the infrastructure needs here, not only to maintain what we have but to develop new facilities if we need to. That should be part of the Government's infrastructure plans and make it possible for such things to develop in the near future. It is deeply regrettable that the situation at First Milk happened and that so many farmers were left in such dire circumstances earlier this year. However, it was a wake-up call for a food that is native to this country with latent potential. However, if there is a silver lining, it is that it prompted the urgent attention of the Racky Committee and all that that entailed. Publicly holding those responsible to account, gaining much press coverage and attention to our inquiry, which shone a light on parts of the supply chain that has been, and still are, shrouded in too much darkness. Our letter of recommendations to the Scottish Government, many of which have been adopted in the Scottish Dairy Plan, are at last, but not least, this debate. It allows this to get the currency that it should in our country. I am hopeful that the outcomes of all this collective effort will soon see the entire Scottish dairy industry in a much better place than it was a few months ago and collectively looking forward to a much brighter future. I ask the Parliament to welcome the committee's work on these important issues and to support this motion. I thank the committee for holding the inquiry into the dairy sector and sponsoring this debate today. The inquiry helped to shine a light on many of the issues that do face our dairy sector in Scotland at the moment. My discussions with the committee last month were really helpful and worthwhile. I welcome this further opportunity to debate many of the issues that we covered that day and, of course, are contained in the committee's excellent reports. I commend all the members for their efforts in putting that report together. The dairy sector is, of course, extremely important to Scotland and is at the heart of our agriculture and food sector. Our 900 dairy farms and 90 processing units sustain livelihoods throughout urban and rural Scotland. Their output and activity is key to our rural economy and the fantastic products that are produced are integral to the amazing success story that is Scotland's food and drink. However, the sector, as we have just heard from Rob Gibson in the committee chair, has been experiencing a further period of volatility and poor market returns for some sectors. In part, that is the consequence, again, as we have heard from Rob Gibson in the committee found out, of large-scale international events, particularly the Russian ban on EU imports that flooded European markets with dairy produce that would have normally gone to the Russian market and the fall in Chinese consumption as well, which, of course, is one of the world's biggest markets. However, it also reflects structural issues as well. Too much of the Scottish industry has, for many years, been too reliant on liquid milk in the commodity market rather than adding value wherever it can. That is not simply my view, it is certainly my view, but, when I speak to dairy farmers, the length and breadth of Scotland, that particular view is echoed back to me by farmers on the ground. I think that that is widely recognised. We are now starting to recognise the opportunities that lie ahead for the industry to move into better times, because the prospects for the sector remain good and we should be optimistic. Our climate in this country is very well suited to grazing and dairy production. Our natural environment is a fantastic asset. Our food sectors that we all know are booming, both at home and abroad, and our dairy products from this country are first-class and up there with the best, and their dairy farmers themselves are among the most skilled and talented in getting anywhere in Europe. The task before us is to allow the sector to weather the current storm, get through that, but in such a way that it can grasp the prize for the medium to long term. The Government is fully committed to supporting it to do just that. In September 2013, we commissioned James Withers to put together the Ambition 2025 report, which set out our vision for the industry's medium to long term future. The recent bout of volatility that we are discussing today has brought about fresh impetus to realising that ambition. In light of recent events, last week, I published the Scottish Government's dairy action plan to bring together all the various workstreams that are under way at Belduci farm in Angus, which was kindly hosted by the dairy farmers Willie and James Taylor. The action plan effectively builds on Ambition 2025. It aims to improve the resilience of the sector and provide the valuable platform to ensure that the entire industry can thrive against these volatile market prices. It sets out short and longer-term actions to intensify steps already taken to drive forward that positive change that we all want to see. A key component of the plan is market development and the huge opportunities that beckon both at home and abroad. It is no secret that our larger in this country is world-renowned for quality and provenance. The world out there wants what we have in this country, and our dairy produce is absolutely central to Scotland's offering. Our industry therefore has enormous potential to grow its market share around the world. Indeed, that was the key driver behind the establishment of the dairy growth port, which is chaired by Paul Grant, which was set up by the Government following Ambition 2025. The board is currently developing a strong Scottish dairy brand to help our market potential and boost our share of the international markets. I want Scottish dairy produce to be seen alongside other iconic brands such as Scottish beef, lamb or salmon or many other products. The brand that we are going to announce later this year will, and I believe that it will, help us to do just that. We will be presenting the Scottish dairy brand at the Highlands show in June, with its official launch at the world's largest food exhibition in Germany at Inuga in October. We will also continue to support the work of the dairy growth board to our focusing on emerging markets from North America, Canada to Japan. With global demand for dairy set to surge by 36 per cent over the next 10 years, it is estimated, driven by population growth and rising prosperity, and returns on export markets reportedly to be up to three times those at home, we need to reverse the over reliance on the domestic market that currently accounts for well over 90 per cent of sales. One cheese producer did say to me that the block of cheese that is sold on an overseas shelf gets three times, but the same block of cheese gets on a UK shelf. Therefore, it makes sense to address the situation where, currently, the domestic market accounts for 90 per cent of our sales. It is a bit of a no-brainer, and I think that that is why we are all rallying behind a bigger export drive for Scottish dairy produce. I appreciate what the minister is saying. Is the SDI doing something about that to ensure that we do try and get more into the export market? Cabinet Secretary? Yes. Many of those steps are outlined in the dairy planet that I just recently published. The focus of Ambition 2025 is to work with Scottish Development International in overseas promotion. Through our wider food and drink strategy, there are many more overseas posts being established now, dedicated to food and drink, and they will be, hopefully, a solution to where we want to go to with our dairy vision, because we have put in a huge amount of effort more than ever before into overseas food promotion, and dairy will be at the heart of that for the reasons that I have just given. Mr Stevenson? Is the cabinet secretary aware of the relatively low consumption of what I might term real cheese in the United States? Almost all cheese there is barely worthy of the name being processed cheese wrapped in tinfoil. To what extent can we get into the US market with our cheese, our milk products, and encourage the Americans to eat more healthily, which I am sure they would benefit from, but also benefit our producers? Cabinet secretary? We certainly make real cheese in this country, and we will ensure that more Americans never before enjoy real cheese in the years ahead. Stewart Stevenson is right to highlight the massive opportunity of the US market, and that is a big, untapped opportunity, and will certainly be a target for the SDI and the wider industry in terms of exports. Turning back to our home market, on our domestic market, of course we have a lot to do to build our market share in this country as well and across these islands. With cheese and butter imports currently accounting for 64 per cent and 51 per cent of UK requirements, there are big opportunities out there to reverse that trend. Those in their own doorstep must do more to help to showcase their own produce in this country. It cannot make sense with the quality of products that we have in this country, that in Scotland, and I will repeat that, in Scotland this country, 98 per cent of spreadable butter sold is produced in Denmark, the biggest selling yogurt is German and our best selling cheese is from Cornwall, and that was, indeed, concerns echoed by the committee and Rob Gibson in his opening remarks. So now is the time for change, and I hope that when we look back in 10 years' time, our products will dominate the shelves and supermarkets and menus, the length and breadth of this country and these islands. If I've got time, yes. David Stewart, how important is public sector and private sector procurement as far as developing and domestic market? Public and private sector procurement in terms of food service companies has got a huge role to play and, again, it's part of our wider food policy. I can assure Dave Stewart that we're putting a lot more effort into that. In terms of public procurement in this country, around 55 per cent of our cheese and yogurts, etc., are Scottish, which is way above what's stocked in our supermarket shelves. Nearly all our liquid milk, as you can imagine, originates in Scotland as well. So there's still more to do there, and particularly in terms of the food service companies in the private sector, that's a very good point to highlight, and we're certainly doing a lot of work with our food service companies. I should say, though, that good marketing to try and reverse some of those trends only works if based on a strong supply chain. In recent weeks and months, I've met many of our farmers in the dairy sector, and one consistent message is that there is scope to be better at sharing best practice in the many areas that contribute, of course, to dairy farming. We need to have effective measures to provide information services bespoke to dairy farmers, making it easier for farmers to benefit from practical advice from both advisers and their peers. We have already given priority access to the dairy sector to whole-farm reviews and will enhance the role of dairy monitor farms and their initiatives to promote best practice in agriculture at the moment. The dairy hub, which we set up following Ambition 2025, is a one-stop shop for advice, and it's also making really good progress at the moment. I'm conscious, however, that some dairy farmers need more direct tangible help. I'm sure that the whole chamber is pleased that the chancellor listened to representations from the Government, industry and extended the tax averaging provisions in the recent budget from the current two years to five years for Scottish dairy farmers, taking effect from April 2016. We also need to focus on the wider issues that play a role in the efficiency of the sector, which is why our plan is promoting a transparent and efficient supply chain. The grocery code adjudicator is fundamental to safeguarding the transparency of the market, and I will be meeting her soon to discuss how her role can benefit and help our Scottish producers. I'd also like to take this opportunity to acknowledge again the work done by Alec Ferguson, who happens to be sitting in this chamber, who was appointed to review the voluntary code in the UK. I want to commend his good work in doing that. It's now important, of course, that his recommendations are considered by the industry, and I urge the NFU and the Dairy UK to agree a process for doing just that soon. The voluntary code was an example of effective dialogue between farmers and the processing sector, and the processing sector is at the heart of a successful dairy industry in this country. If we are to realise our ambition for the industry, there must be sufficient processing capacity in Scotland, a point again highlighted by the committee. The Governments and their partners are actively pursuing that at the moment, and I hope that we will be able to update the chamber on progress in the near future. There is confidence out there, and it is clearly high, and we have to capitalise on that. Indeed, only yesterday, I am sure that we are all delighted to see Graham's family dairy announce exciting plans for the future with a new £20 million processing research and training centre in Stirling. That is a company that is Scottish-owned, Scottish-based, using Scottish produce that is going from strength to strength, and it is a great sign of optimism for the future. There are other players out there, of course, and, quite rightly, Rob Gibson mentioned first milk. With a large number of members, the co-op alone accounts for over 25 per cent of our dairy farmers. Securing a thriving future for this company, therefore, is vital for the future of the sector. We have been working closely with the company for several months and are committed to supporting their plans to transform its business, including its investment plans for the creamery at Campbellton. I am pleased to confirm that, following further detailed discussions with the company on the revised plans, we have now offered them a new financial support package of £450,000, which can be drawn down in the next few weeks, and we expect to be drawn down in that timescale. I hope that things will begin to move forward with that new investment. The improvements to the processing facility would, of course, be a big step in the right direction for the future of our dairy industry. We do, however, recognise that there are other issues facing the industry, particularly those based in Ireland's remote areas. Transport costs, as the committee highlighted, is clearly one of those, where haulage costs for dairy are not discounted in the same way as other trades. That anomaly has its roots in history and affects other sectors as well, such as timber, construction and fuel. Clearly, the current fair regime needs to take into account our rural industries that operate on a domestic and international scale. As the chamber will know, the Government is conducting a comprehensive review of very freight fares across the ferry network. The aim of the review is to deliver an overarching fair structure for all of Scotland's islands that is fair, transparent and straightforward. I have agreed with Transport Minister Derek Mackay that the review will take particular account of the needs of those in butte and contire for whom ferry charges are a crucial issue. He is also willing to meet farmers affected in the very near future to hear about the challenges at first hand. I am sure that that is an offer that the industry will want to take up extremely quickly. The impact of today's challenges may be local, such as those for butte and other islands, but its genesis, of course, is international. It is clear that there is a need to focus on how international events play a part in the economic health and wellbeing of the dairy sector in Scotland and, importantly, what part Scotland can play. We must get the international rules right, and Europe's agricultural ministers must keep a focus on dairy. As today marks the official end of dairy quotas, Europe must also monitor world markets to have a good understanding about the future impact of the removal of dairy quotas. We will also continue to push for EU recognition of local products, in particular from remote areas such as Ayrshire and Locchies, which has been awarded PGI status just last week. The committee has done an excellent job in investigating the current plight of the dairy sector in Scotland and holding many of the key players to account. Our dairy action plan developed the right range of partners and, in part, in response to the committee's findings, will, I believe, provide the right platform for a Scottish dairy industry that goes from strength to strength, and I am not alone in that optimism. Indeed, Carlo Petrini, the world-renowned leader of the slow food movement, and his visit to the Parliament just earlier this month was exuberant about the prospects of a dairy sector. In conclusion, given our pastures, our climate, our products, our farmers and our heritage, he saw no reason why Scotland could not be hugely successful players in the world dairy scene in years to come, and we should all share the same view. As we debate our response to the current challenges, we will do well to make sure that we keep that perspective and keep driving forward to deliver the best future for Scotland's dairy farmers, and I thank the committee for the report. Thank you very much. I now call on Sarah Boyack, eight minutes please. Thank you very much, Presiding Officer. I think for all of us, the dairy industry is an important part of our economy across Scotland, but I think it's particularly important in some of our island communities, and like many of the local industries and companies that we have across Scotland, our dairy industry is affected by global economic trends, and that's why our committee needed to carry out the report. However, it's important to take the starting point, which I think is in the Scottish Dairy Review and is expressed really well by James Withers in his introduction to Ambition 2025. Our climate is well suited to grazing systems and dairy production, and our natural clean environment is an extraordinary asset. I think that that has to be our starting point, and we've got to make sure that we can retain the industry, that we can enable it to modernise, and that we can enable it to be successful. That means that we need to find sustainable milk production in Scotland, we need new markets for milk, and particularly we need to focus on where new jobs can be created in Scotland. For me, that is the prizes of getting it right on dairy. The dairy review also reported the important and significant increase in international ownership of operations in Scotland, with companies such as Arla, Lactalis and Muller. That poses us a challenge to make sure that we find a way to influence and encourage those organisations to invest in Scotland and to see the industry that they are involved in in our country as being important and worth investing in for the future. I think that the review was an important piece of work, and it was interesting to see that that report also identified volatility in global markets as a major challenge. The report was done some time ago, and when we had the problem of first milk earlier this year with the delayed payments at the start of the year, that was what triggered our Racky inquiry. That has to be the backdrop to our committee inquiry. The industry is important to us. It should have a good future, but with global competition and global markets, it means that we really need to focus on what we can do in the short term. I think that the speeches that we have heard so far that talk about that are right to do so. I think that the support that is now going to be given to first milk is important. I suspect that we have all had the briefing for first milk to talk about how it is going to be reshaped and refocused over the next few months. Its success is absolutely critical, particularly to some of our smaller dairy farmers. We do not just need to see the lessons learned, but we need that company to be successful. In our work as a committee, our inquiry took evidence from a range of stakeholders, but in particular farmers and retailers. The key issues that we looked at in terms of transparency pricing, scope for EU action, the role of the UK groceries adjudicator and the need for new markets and crucially innovation for new products are the issues that have been focused on so far. For me, we have made progress over the past two years, but some of that progress is fragile because of global volatility. We need to focus on ways to reduce the impact of that volatility in Scotland. Evidence has come that there is more work being done by our farmers on productivity, both from support from the Scottish Government and retailers. The big-ticket challenges that were outlined in Ambition 2025 are still there. The minister finished towards the end of his speech about the issue of transport. I will come back to that, but I want to start with the committee's comment and the ambition that we set out in our report. Everyone involved should work towards a more sustainable, equitable and profitable dairy industry in Scotland, where all producers are paid an appropriate price for the goods that they produce and where consumers can make informed decisions about what to buy based on clear information about where produce comes from and how much it costs to produce. Those are really important principles. Everything that we do from that, the eight-point plan that we identified, the recommendations that we made to the cabinet secretary, is encapsulated in that quote. In the time that I have, I want to look briefly at the issue of pricing and procurement, the challenges that Scottish producers particularly face and then to talk a bit about the end about consumer information and consumer choice. For many farmers, the current Fargate price simply is not enough to cover the costs of production and transport. We can look to greater productivity and that is crucial. Much was said in evidence to the committee about initiatives to push up productivity. In the end, the nature of the volatility of the prices and the nature of the dairy market make it extremely challenging at the moment, particularly for the smaller island dairy farmers. If the price paid for milk does not cover costs and it does not enable investment in new process and infrastructure and does not cover the cost of transport to market, then it is easy to see why it is a really difficult industry to stay in at the moment. The NFUS note that farmers in our most rural communities are receiving milk payments well below the cost of production. Some have said to us that the price is not crucial, but there is a fundamental economic issue. If you do not earn enough to cover the cost of production, then you are not a viable business going forward. You might be able to sustain it for a short period, but in the long term you are not going to be there. We have to try and work around that short term issue, because everybody who talks about the long term future for dairy talks about it as a really successful industry, so we need to get through the short term. The minister talked about the issue of transport and he said that there is going to be a review in October. It would be useful for us to know particularly what will be special for dairy. One of the things that was said to us was that when the ferries do not run due to bad weather, the milk is just lost, completely lost. There is an issue about the access to preservatives to make the milk last slightly longer, but there is also an issue that milk is more sensitive to time than other produce that might be coming off the islands. That needs to be reflected in the review. Secondly, the issue of innovation and the generation of new dairy products that is made in Scotland. The cabinet secretary identified in his action plan that December is the target to seek to encourage new investment in processing capacity in Scotland. I think that the announcement that he has just made on behalf of Grains is really important and really welcome, but I think that it would be interesting to know what other options you think are around the country, where you think there could be wins. The lack of innovation was highlighted in the ambition 2025, meaning that we have very few Scottish yogurts, salad cheeses or spreading cheeses available for consumers to buy. I take the point that Stuart Stevenson made about cheddar, but if you look at the market for dairy, we have to have a much broader range of products to buy. We have to have Scottish products that people will recognise and will see the quality. I have to say that my own consuming habits have changed since doing the inquiry. I have become much more choosy going around the supermarkets. The briefing that we had from NFUS Scotland was really eye-opening. There are a number of products that I have been buying for years on the basis that they look quite local. I discover that they are not. The branding looks local, but the ingredients are not local. The issue of transparency for consumers is key. We need good value for consumers. I would be the last person in the chamber to say that I want to see the price of milk rocketing. Our consumers are really hard pressed at the moment. The issue of food banks is something that all of us are hugely aware of. It is not about rocketing prices, it is about getting value, and it is about getting clearer labelling. The source of products being clearly identified would let us see whether we are really buying local Scottish or British, and that is not clear at the moment. We need more new products. We need more innovation and product development. It would be interesting to see what other developments the minister thinks SDI, Scottish Enterprise and High are going to deliver before December. We need to make sure that we get progress here in the short term, because some of our farmers must be on the verge. We got that sense from talking to dairy farmers when they came in to speak to us. There is good work happening, but there is that short-term imperative of making sure that people survive the current volatility and the current challenge of pricing so that they can become more productive. At the end of the day, we have a better and bigger range of products that our supermarkets and our smaller retailers can sell. In my closing remarks, I get to do our sum-up and I am going to talk a bit more about the procurement side, because I think that that is an issue that we could have maybe spent more time in the committee in retrospect on. The word volatility has been used quite a lot already in this debate, and I am sure that it will be used again. It is quite easy to forget that it is less than three years ago that dairy farmers across the United Kingdom decided that they had enough when it came to the price cuts that were being imposed upon them by their milk processors. They began a series of protests that were marked for their good human and entirely peaceful nature, which culminated in Scotland, at least, with a rally in Lanark on 30 July 2012. That rally was attended by dairy farmers from all over the UK, as well as, if my memory serves me right, by the cabinet secretary, by Claudia Beamish and by myself. If I have left anybody out, I apologise. The demands of the producers at that time were fairly simple. In essence, they were that the two recently imposed price cuts should be reversed and that a fairer, more transparent pricing system be introduced, including a code of practice on contractual arrangements between producers and processors. The purpose was equally simple—it was to help to secure a sustainable long-term future for the dairy industry. It worked, through a combination of political pressure, producer action and, importantly, great public support, the processors and retailers backed away from imposing the threatened cuts. Retailers agreed to pay an enhanced price to their direct suppliers, and a voluntary code of practice between producer and processor was agreed and published in October 2012 under the auspices of the then defra-minister Jim Pace MP and eventually implemented in the spring of 2013. For a while, all was well. Increasing milk prices, lower feed costs and a much improved relationship between producer and processor as a result of the voluntary code brought a period of relative prosperity and stability to the sector. However, as we are all now well aware, that period was all too brief and we find ourselves once again seeking solutions to try to secure that sustainable long-term future for the dairy industry. Although that call is the same as it was in 2012, we acknowledge, I think, all of us that the causes of this crisis are not the same. This time, it is principally global factors that are to blame, leading to a world surplus of liquid milk, but that is also coupled with a specific localised factor in the shape of first milk, the UK co-operative that purchases some 40 per cent of Scottish milk. It is particularly important, as has already been said, to the more isolated and vulnerable milk producers on our islands and on some of our more remote areas. However, let us be in no doubt that we are in a crisis situation. It was in light of that that the Rural Affairs, Climate Change and Environment Committee took the decision quite rightly to hold a short, sharp inquiry into the situation, with a view to hopefully adding something positive towards what might be done to address the various issues. As has already been said, we heard from producers, from processors, from retailers, albeit somewhat reluctantly, and from the grocery code adjudicator. I was happy to support our findings as represented in the convener's letter to the cabinet secretary, which, as the motion suggests, has been well reflected in the recently published dairy action plan. That plan focuses on five main principal points on market development, on promoting best practice in dairy farming, on promoting a transparent and efficient supply chain, on getting the international rules right and on supporting first milk in transforming its operation. The whole plan is backed up by a timeline of end dates by which the various points of action are to be agreed. All those points are worthy. They are all probably achievable. If they are all successful in negotiations and put in place, there is no doubt that the dairy sector in Scotland will be in a much better place. The convener and others have mentioned the importance of transparency, and I want to focus on one particular aspect of the plan in what time I have available to me. That is on the next steps for the voluntary code of practice for contractual relationships. I will declare an interest, as the cabinet secretary has also pointed out, in that I chaired a review of the voluntary code between April and October of last year. The dairy plan calls for discussions on the next steps for the code in June. In my view, it cannot come soon enough, because although the code is still in its infancy, I do believe that it has a very important role to play. Over 80 per cent of Scottish milk is now produced under code-compliant contracts, if I can call them that. The major processors have all adopted it, and where it has been fully entered into and embraced by both producer and processor alike. It has brought about a hugely increased degree of openness and trust in that first link of the dairy supply chain. To the extent that, in some cases recently, the need for recent price reductions has been fully talked through and discussed openly with the producers and reluctantly thereafter understood and largely accepted by them, thus avoiding the protests, frustration and anger of 2012. That is quite a step change in that relationship. However, the fact remains that many medium-sized and smaller processors have not adopted the code for a variety of reasons. It is voluntary after all, but I am in no doubt that universal adoption would be to the benefit of all. How can you achieve that with a voluntary code, even if it is one that has the threat behind it of a compulsory European code if it is necessary? My principal recommendation in the review, which is non-binding but which was warmly welcomed by both NFUS and the NFU, was that discussions should be initiated with the third partner in the supply chain, the retail sector, to explore ways in which that sector might be brought within the realms of the code. I am very aware that some within the processing sector are not particularly comfortable with this proposal, but I did have limited talks at the time with two major retailers and I detected during those talks a genuine willingness to at least explore that possibility. If it did prove possible to bring all the links within the supply chain into the code, the transparency and trust that has undoubtedly improved between producer and processor since the code was adopted could become a feature right across the dairy industry as a whole. That could only be a huge step forward for the whole sector. At the very least, it could help to expose and therefore discourage some of the more nefarious practices that we hear about from time to time, such as processors having to pay in order to get premium shelf space for the product. In closing, the plan is absolutely right to focus on better labelling of true Scottish products and getting them on to the premium shelf space of our retailers. The Scottish Dairy brand is an excellent initiative, too, but we must add value at every possible opportunity, and that means increased investment in processing. Although it is not part of the plan specifically, I do think that we should also take every possible opportunity to emphasise the health benefits of this wonderful natural product. This year of Scotland's food and drink, as I am sure almost everyone will emphasise, provides a perfect platform for doing that. In closing, the good news is that everyone who came before the committee and I think that everyone in the sector believes that the future is bright for the dairy industry. If this plan could be fully implemented, it could be even brighter still. Many thanks. We now turn to the open debate. Speeches of around six minutes. I have some time in hand at this stage for interventions. I call Bruce Crawford to be followed by Claudia Beamish. Thank you, Presiding Officer. I am very glad that this debate has been scheduled, as it provides me with a chance to reflect on the challenge facing many dairy farmers not only in Scotland, but in my constituency in particular. In December last year, I was afforded the opportunity of meeting with a group of dairy farmers at West or Third Farm at Gartmore in my constituency. I met a number of those farmers before. Let's say that their approach is always robust and workmanlike. On this occasion, though, there was a distinct change in mood—anxiety and fear hung in the air, as well as a ground determination to get through the latest crisis in the farming industry. The crisis is, of course, the reason why it is being here today, being the dramatic collapse in the price of milk, particularly in regard to those who had contracts with first milk, but not exclusively. The discussion, as you might imagine, was centred on what could be done to help the crisis to become a catastrophe. It ranged from the impact on EU sanctions on Russia while having the international milk market to the role of the supermarkets in determining the price of milk. From the need to see what could be done to improve the operations and performance of first milk, to, in the medium to longer term, creating conditions for an improved and enlarged value adding processing industry in Scotland, with both Irish and Danish experiences being put forward to me as good exemplars of where achievements have been made. From the potential impact of the ending of the EU milk quota arrangements, to the ending of the misleading labelling that is holding back growth sales of Scottish products, many of those issues were discussed and reflected in due course in the content of the letter that was sent by the Rural Affairs, Climate Change and Environment Committee to the Cabinet Secretary on 20 February. The convener and the committee deserve our thanks for undertaking such a quick, but none of the less detailed and comprehensive inquiry. Of course, the cabinet secretary himself responded to the situation by publishing in March the Scottish Government's dairy action plan, which I welcome. I was also very grateful to the cabinet secretary for taking time out of his busy schedule early this year and personally meeting with a group of dairy farmers from my own constituency. However, despite the good work that is going on for many dairy farmers across Scotland, it remains dire. For them, it is not about surviving—not about the long-term, but actually about surviving—2015. I do not know if it is possible, cabinet secretary, but whether some of the timescales that could be looked at again in terms of the delivery of the plan, I think, would be usefully re-looked at. I think that that was also perhaps hinted at by Rob Gibson in his contribution. Why? Because milk prices will be down again from tomorrow to an average of only 15.5 per litre for small producers of forced milk after their two-pence capital contribution, which was rightly mentioned by Alex Ferguson in his intervention on the convener and his opening speech. That, for example, will be one of my farmers who I spoke to just yesterday afternoon with an annual check for 2015 for a miserly £5,500, whereas in 2014 it was £10,300. There, you can see the scale of the difference for a small operator. That price is simply unsustainable, and I wonder how many dairy farmers will lose from the industry if the situation pertains. We all know that milk, cheese, butter, yogurt are some of the staple foods that are consumed by the majority of households in Scotland. We also know that Scotland is one of the best producers of those products in the world. Cabinet Secretary of Health and Welfare on Grains Dairy, earlier and important employer of my constituency, is a prime example of a family-owned Scottish company that is leading the way. It is good to see that Grains announced today in the media a £20 million investment in a new dairy and research facility at Craigforth and Sterling, which will create another 450 jobs. That is good news, but I believe that for the potential expansion of the industry in Scotland, it is being hampered by bad and misleading labelling practice. That is why I recently submitted a motion to Parliament calling for the introduction of a Made in Scotland label for Scottish produced dairy products. Having a Made in Scotland label would not only benefit Scottish farmers and producers but would also make it much easier for consumers to identify and buy Scottish produced products. Product labelling is one of the areas that I have been taking a particularly interest in, especially after hearing from the NFU Scotland representatives a meeting recently with other MSPs here in Parliament. Like Sarah Boyack, I was a bit shocked to say the least myself that the products that they were able to tell us about looked Scottish were in fact made in France, Ireland or in other European nations, despite the fact that they had the salt ires and the branding all over them. That means that, even when consumers think that they are doing the right thing and buying local produce covered in the Scottish symbols and salt ires, they often aren't. It has already been recognised by the cabinet secretary and by Rob Gibson. That has helped to lead to a situation in which the biggest spreadable butter sold in Scotland is Danish, the biggest cheese brand is Cornish and the biggest yoghurt comes from England. That is a disappointing backdrop, but it is also a golden opportunity for Scottish producers. I recognise what the cabinet secretary has said about opportunities in exporting, but much more could still be done to penetrate into the domestic market if we had the proper labelling and proper made in Scotland address around about that. That is why I was so pleased to read in the daily action plan that the cabinet secretary will be pressing DEFRA to accelerate the timetable for extending country of origin labelling. He will also be holding DEFRA to account to argue for re-ewe recognition of a made in Scotland label, something that was agreed by all parties during the Smith commission discussions. Assisting consumers understand where their food is being produced can only help to encourage them to think Scottish when buying their groceries. In turn, that should read to greater sales of Scottish produce, helping to boost the dairy industry and motivate milk producers to invest further in Scotland. We have heard others say, as I conclude, that the year of food and drink in Scotland, I want to help our dairy farmers to capitalise on the worldwide reputation of Scottish food and drink. Getting more of our wonderful Scottish produce not only into stores but into prominent positions in those stores must be a priority. As I said in my motion, the provenance of Scottish dairy products could increase sales, motivate milk processors to invest further in Scotland, provide an avenue for food manufacturers and give a significant boost to those producing the finest of Scotland's lardar. That direction can only be good news for dairy farmers and consumers alike, and we need to hasten it along just as quickly as we possibly can. Thank you. Presiding Officer, it is important that we are having this debate today in view of the recent and very regular price volatility in the dairy industry, and it is right that we held the Racky committee inquiry and wrote to the cabinet secretary. Now it is absolutely essential that the Scottish Government dairy plan, which the cabinet secretary acknowledges, was in part in response to the committee inquiry, is robustly implemented. I met dairy farmers who supply grams at the Lanark auction mark last week. Those are family farms on marginal land who are really up against it in the present climate in spite of Graham's ethos and the top farmgate price. I was heartened to see in the section promoting best practice in dairy farming of the Scottish Government's dairy plan that there is an intention to give priority access to the dairy sector to the whole farm reviews and the new SRDP advisory services and actively encourage farmer uptake. How will the Scottish Government make this known to dairy farmers? In this section also we hear that the Scottish Government will continue to support the new dairy hub, as the cabinet secretary mentioned today. I wonder if the cabinet secretary might give more detail in his closing remarks about whether this work will be regional or central and how it will be advertised again. The need to alter power structures is, in my view, at the heart of the development of a sustainable dairy industry with a fair farmgate price in the future. Producers organisations could have a significant role to play in the future and as a member of the Scottish co-operative party group of MSPs, I am eager to highlight some issues here. The Scottish agricultural organisation society works hard to promote Scottish farmers and to strengthen the sustainability and the competitiveness of the food and drink and other rural industries through co-operative principles. Owned by and working for its membership, SOAS is a strong example of supportive and advisory infrastructure for agricultural and co-operative development. In January this year, the Milk Supply Association began operations as an independent producer association, with the assistance of SOAS, the Milk Supply Association members, represent 80 per cent of milk supplied to the processor, the fresh milk company Caledonian cheese. With SOAS's help, processors and producers are able to enjoy closer working relationships and commit to transparent and firm milk pricing processes. In several EU countries, agriculture co-operatives dominate, with average market shares exceeding 50 per cent, whereas in the UK this sits at 25 per cent at present and it has been identified as an opportunity for expansion. Arla Foods, a Denmark-based company, as we know, now has the UK dairy membership and has become one of the largest UK milk processors. In 2012, Arla's throughput was 15 times that of first milk. Ventures of this scale provide financial gain, but also bring knowledge and market access, as well as demonstrating the huge benefits and co-operative agribusinesses that are waiting to be secured. As our convener stressed, the committee was disappointed by some of the first milk evidence and I will be sure to be looking along with the committee to see how developments are quickly taken forward with the new CEO in charge and the new plan. I was also, frankly, very disappointed and found it unacceptable and profoundly unhelpful that some supermarkets thought it appropriate not to co-operate with the rural affairs committee in the first instant. The co-operative group on Aldi and also Waitrose agreed to take part through video link, the latter that is, were positive from the start. The impression given by others, frankly, was that some supermarkets thought they were allure unto themselves and it was a very negative approach in a time of crisis for producers that they declined to come before us in the first instance. Moving on though, some of what transpired in the evidence sessions actually was positive from the supermarkets and I believe that the whole inquiry process has perhaps sent some messages to them about working more closely and transparently throughout the whole dairy chain. In relation to the support by supermarkets for local Scottish dairy products, as other members have said, consumers cannot buy if they don't see, it's got to be on the shelves. It is right that the Scottish Government has included in its timeline for July engaged with the grocery code adjudicator. I do believe that there is an issue about whether the remit of the adjudicator might be extended to go further down to the producer as well, although I appreciate that this is a complex issue. Public procurement is also a significant issue and I ask the Cabinet Secretary to give more details for support, for an expectation of purchase of local and Scottish produce. For instance, as a very new young, that's Freudian slip, excuse me, Presiding Officer, as a very new gran, I would like to question why milk isn't, for instance, a daily menu option in the Wishill General hospital. As for new products more generally, highlighted in our committee evidence sessions, in this year of food and drink, I ask the Cabinet Secretary a question in January about niche markets and seeking reassurance about the initiatives that the Scottish Government and Scottish Food and Drink, importantly, are taking to support these markets, such as Lanarkshire Blue and Lock Arthur cheeses and many others across Scotland. Working in partnership, we must ensure that there is support for new initiatives and I believe that the committee inquiry, like others have said, has helped to focus on this urgency. I'm delighted that the dairy plan includes the launch of the dairy brand in October and would encourage all those along the supply chain to actively take part. I understand that the farm gate price for the organic dairy sector has held up well but that that could be due to some organic farmers going out of business rather than expansion. Can the cabinet secretary tell the chamber what is being done to support organic farmers as this is a niche market that could be taken forward and I haven't seen reference to it in the dairy plan? Exports are, as other members have said, a strong part of the picture and I hope that the cabinet secretary will say something further about specific support through SDS. I wonder about the price of these products on shelves abroad but surely transport is going to be one of the things that puts up that price. More capacity is also needed, as we've heard, in processing initiatives. NFUS has stated in a press release this week that work to progress a Scottish dairy brand must be underpinned by investment in processing capacity in Scotland so we have the ability to produce both commodity and added value goods from Scottish milk closer to our own milk fields. I'm delighted to hear the announcement of Graeums as many other members are. This is also a carbon miles issue. In response to this part of the dairy plan, NFUS Scotland's milk committee chairman commented that the Scottish Government's intention to actively encourage investment in new and diverse processing must bring speedy results so it was disappointing to see that the timeline from the Scottish Government in the dairy plan to encourage new investment in processing capacity is for December, although the cabinet secretary has acknowledged today that discussions will be on-going. I hope that we will be able to work with the cabinet secretary in the committee, and I also hope that the cabinet secretary will involve the cabinet secretary for infrastructure in processing issues. In the words of our convener, the dairy pricing must not be shrouded in darkness, it must be transparent, we must all work together for the future of our industry for everyone's sake. Thank you, Presiding Officer. As a member of the Rachi Committee, I'm pleased to contribute to this debate today and I'm pleased that such an important issue concerning the agricultural sector has been allocated the maximum amount of time for debate available in this chamber. There is no doubt that dairy farmers are struggling with many close to closure due to the sharp falls in the international price of milk, with its knock-on effect on Scotland and also discounting by UK supermarkets much as they would deny that they are the main cause. Many dairy farmers are clinging on partly in the hope that the situation will improve later in the year, as most agricultural pundits predict, but many hold on because dairy farming is all that they know and do not want to transfer to other types of farming. Clearly, the volatility of the global market leaves the industry looking very much like rabbits caught in the headlights when the going gets tough, so it is the responsibility of all of us, including the UK and Scottish Governments, to do what we can to smooth the way of what we will wait the promised upturn in demand for milk. It is generally accepted in the industry that to keep cattle well fed and cared for, farmers ideally need to get about 30p per litre of milk. In fact, most are struggling by on around 24p per litre or even much less due to the global price of milk falling sharply in recent months due to the geopolitical factors, which include Russia banning imports from the EU in retaliation for sanctions imposed in the wake of its annexation of Crimea. At the same time, a slowdown in growth in China, as we have already heard, has led to less demand for imported goods there. However, according to a recent warning by Rabobank Agribusiness in their new dawn for dairy report, it states that the industry could well be facing additional competition from producers in China and New Zealand, where costs of production are lower. So, while the influx of New Zealand lamb to the shores, thankfully, diminishes, we are faced with a further indirect challenge from the southern hemisphere. In addition, Rabobank's report indicates that China's production costs are now somewhere between that of Ireland and the Netherlands, with Rabobank stressing that investing in large integrated supply units will increase the competition that EU farmers have to deal with. Domestically, we see supermarkets compete to sell the product cheaply, forcing down the price that they are willing to pay suppliers, and that is one of the pressures on dairy farmers that must be alleviated. I am sure that we all agree on that. Clearly, from what the committee has seen and heard, the supermarkets are not comfortable with the spotlight on them, which we can see has already helped to concentrate the minds of some major players. Aslar, for example, who has the Scottish distribution centre in my Falkirk East constituency, has its Scottish supplier development academy, which is running partnership with the Scottish Government and Scotland Food and Drink, the academy, which is supported by a grant from the Scottish Government, aims to generate new sales for food and drink businesses by providing expert advice and insight into supermarket trading disciplines. Recent dairy supplier participants in the academy include Connage Highland Dairy, G-Porellian Co, Graham's Family Dairies, Lactalis McClelland and Rowan Glen. Following their time at the academy, those suppliers have experienced significant sales growth and product range expansion. While such support for the industry is extremely welcome, we should also take note of the NFUS briefing that we received prior to this debate, which highlights the fact that, while some supermarkets label products as Scottish, they are not. I do not want to single out individual supermarkets, however, as an example provided by NFUS. Rowan Glen's beddable butter is displayed in Aldi alongside a love heart incorporating a saltire to signify that it is Scottish. However, Rowan Glen is owned by Northern Irish Dale Farm, who only exclusively used Scottish milk in the production of their yogurt. We also hear that Galloway's spreadable Scottish cheddar is manufactured in France, albeit with Scottish cheese. There is no doubt that improved labelling will result in milk processors investing more in their Scottish facilities in order to create truly Scottish products. Ideally, as we heard at committee, the grocery's code adjudicator should be given more powers so that she can help to ensure that farmers get a fair price from supermarkets. As we know, the adjudicator's office was created in 2013 to regulate the relationship between supermarkets and suppliers. However, because most dairy farmers sell their milk through intermediaries, the current adjudicator Christine Takon is not able to investigate their complaints, so I am glad to hear the cabinet secretary say earlier that he is due to meet her very soon. Clearly, marketing is the key. Retailers, manufacturers and processors must make greater effort to promote Scottish dairy produce both at home and abroad. While prospects for Scotland's dairy industry will undoubtedly improve, there is steep competition out there with processing capacity in other northern European countries being ramped up, in particular Ireland, France, the Netherlands and Germany, all of which are building or planning to build milk powder, whey and cheese plants. That is why market development is probably the most important section of the Scottish Government's dairy action plan that was released last week. In addition to members already highlighting the Graham's announcement, I was also pleased to see local firm Graham's of Ridge of Allen putting its money where its mouth is, with yesterday's announcement of a £20 million dairy plant with research and training facilities at Craigforth on the outskirts of Stirling. Thirty years ago, I was training as a livestock auctioneer with United Auctions at Kildeen in Stirling. I remember the size of Graham's dairy business then, so it is heartening to see the firm go from strength to strength and be led by a family that is 100 per cent committed to the industry. Of course, another aspect that hitting milk producers is transport costs, especially those producers on islands. I was born and brought up on a dairy farm on the Isle of Lewis, and while we shifted from dairy to beef in the late 70s, I saw at first hand the challenges of freight costs to and from the islands that the freight costs created. I have a lot of sympathy with the calls from the NFUS for prompt action to introduce cheaper freight charges, which would greatly benefit the first milk producers on the islands of Bute, Arran and Gia. I was asking the member that I believe that there are now no dairy farms in Lewis, and I wondered if he would give the reason for that. That is correct. There is a small jersey heard on the west side of the island, but that is all, and it is a number of reasons, but clearly freight costs were partly to blame. I therefore welcome the commitment of the dairy plant to ensure the on-going review of freight fares across Scotland's ferry network takes account of the impact on dairy transport costs, but I would urge the cabinet secretary to note the call by NFUS milk committee chairman, Graham Kilpatrick, that assistance with regard to freight charges for island producers on costly milk college cannot wait until the autumn, and that help is needed now. This current dairy crisis and our Iraqi committee's urgent inquiry into dairy industry and milk prices has helped to concentrate mines, not least in the retail sector, and I look forward to increasing and improved promotion of Scottish products and Scottish stores and a much healthier industry in the medium to long term. I am afraid that the time that we had in hand is rapidly running out, so I could ask members to keep to around six minutes with time for interventions if they take interventions. Michael Russell, to be followed by Jim Hume. Thank you, Presiding Officer. Can I, at the outset, pay tribute to Rob Gibson, the committee members and to the clerks on the committee? This was the first committee inquiry that I had been part of in over a decade, and I was impressed with the intense discussion, with the intelligent debate and with the incisive outcomes. I am also grateful to the cabinet secretary for bringing forward the action plan. He will not be surprised, if I say to him, that I do think that the one thing it lacks is urgency on the issue of ferry and freight costs, and I will come to that in a moment. I want to also pay tribute to others who are trying to help the present situation. For example, in my constituency, the work of beauty states, who are talking about the possible remission of rent later this year, but have already accepted that rent should be paid in instalments for the rental that is due in May, and have made some other useful interventions to try and sustain a very fragile dairy industry on that island. I want to address three things. The particular difficulties that are caused to my constituents, the dairy farmers in buton kintire, the good and bad practice in the relationship with producers across the country, and the issue of innovation. Let me start, Presiding Officer, with the buton kintire. There are approximately 50 dairy farmers in my constituency. They are not immune to the world, the difficulties with world pricing. World prices have collapsed, and the anticipation is that world prices will rise later this year. However, the situation therein is much worse than others, because they are not in a market, they are part of a monopoly. First milk, for historic reason, is the only processor that can collect milk in buton kintire. That is a historic situation, but it is one that many of those farmers deeply regret, because they are receiving the lowest price that it is possible to pay, as you have heard today, with the new price effect of tomorrow. It will be around £15 per litre plus the reduction that takes place. That is vastly below the cost of production. I want to make that point very strongly. It is vastly below the cost of production. Those farmers cannot continue to produce milk at that price forever. Indeed, they can hardly continue to produce it for a matter of months. Whatever help comes from the Scottish Government has to be targeted very sharply to make sure that those producers can survive this period until prices rise again. The transportation costs, particularly in buton gear, are the big issue. There must be help that comes now on transportation costs. The Scottish Government must step in and provide the discount that is already applied for agricultural feedstuffs. The campaign is supported by the National Farmers Union of Scotland. The farmers demanded that that happened because they knew that it was essential. I will certainly make sure that those farmers meet the transport minister as quickly as possible, but it will be to discuss how that can be done, not if it should be done. However, the rest of the plan is very positive and helpful. As my friend Bruce Crawford has said and as Donald has said, there is a need for urgency in delivering the plan, but it can be delivered. Farmers in buton kintire are working together, but they are all served by their own co-operative. I want to make that point. The management and communications of first milk has been dire. The new CAO, Michael Gallagher, has a major challenge ahead. Certainly none of us in the committee were impressed by the way in which first milk gave evidence. The Scottish Government is now committed, and I am very glad to hear that from the cabinet secretary, to fund the major improvements in Camelton, and that money needs to start flowing immediately. I am assured by first milk that the discussions of the Scottish Government mean that the money will be flowing in the early part of April. However, investment in the creamery in Camelton is absolutely essential for the future of the dairy industries in kintire and, to some extent, the dairy industry in buton, although that milk presently goes to the creamery in Cowdenbeath. There is a good future for the producers in kintire if that investment takes place, because they have a very good product and they have an efficient and effective dairy sector, and they are enormous players in the local economy. However, they have been subject to bad management and bad practice, and that brings me to the second point. What is good and bad in the present situation? Well, bad is the management and practice of first milk. They have made a lot of very wrong and stupid decisions, and that has to stop, and they have to concentrate on what they know and they have to make sure that their practice improves. There has also been some criticism, some of the supermarkets, some of those who were reluctant to come to the committee and those who have been criticised by the adjudicator. However, there is good practice in the supermarkets as well, and I did want to mention that. We took impressive evidence from Marks and Spencer's, from Waitrose, from Little, from the co-op, from Tescom, all of whom had good relationships with their direct suppliers. That is a small number of suppliers, but those suppliers are vastly better off, even with a lower price, than those who are providing to first milk and to others. Indeed, two of the figures who gave evidence to the committee were from Kintire, Calum Kirk from the co-op and Duncan Sinclair from Waitrose, and they have first-hand knowledge of the industry. It is important, for example, that the support that the co-op is now giving to Kintire Cheese, with the launch next Tuesday of the Kintire Cheese Yes, please campaign, and if anybody happens to be in Campbellton next Tuesday morning, as I shall be, then they will not only get a free sample, but they will start a very important relaunch of the product. Finally, Presiding Officer, let me turn to innovation. Of course. Alex Ferguson I wondered if Mr Russell would accept that the direct supply situation, which is rightly highlighted, in which most farmers are slightly better off, does also occur in other areas as well, and indeed through first milk, where first milk supplies other companies with milk on a dedicated contract. It is not quite as simple as saying that all first milk suppliers are on 15 pence a litre, but it is right to highlight those that are, because they are the ones who are most in danger. The member is right to say that, where direct contracts exist, those producers are likely to be better off. Those who have been suffering the vagaries of first milk are not better off and have not been for some time. Finally, Presiding Officer, on the issue of innovation, very little innovation has taken place from Scottish producers and processors. The shining exception is Graeme's. I am glad that it has been referred to warmly throughout this debate, but there needs to be more innovation. We need to put Scottish products on Scottish shelves undoubtedly, but with new products, with strong brand names, they can be exported from Scotland. It is, as Robert Graeme has pointed out, possible to buy English, French, Danish, Irish and Scottish butter in Scotland, but it is not possible to buy Scottish butter outside Scotland. That has to stop, and the type of spreadable butter that Graeme has introduced can be sold now outside Scotland. We need new products trading on the strong reputation of Scottish food and the strong brand names, and then there will be a good future with good plans for a good industry. That is a period of great difficulty. It can be overcome, but in my constituency overcoming it will require substantial help from the Scottish Government, much better management from first milk and investment. Many thanks. I now call Jim Hume to be followed by Joan McAlpine. Thank you, Presiding Officer. As an MSP for South Scotland, I know that the dairy industry is hugely important. Dumfries and Galloway and the air shares are by far the biggest production areas of milk in Scotland. In the year of Scotland's food and drink, it is worth noting the importance of the dairy industry to our general economy, and especially, but not solely, to our fragile rural economies. The dairy industry is worth some £400 million to our GDP and accounts for 15 per cent of farming productivity. In fact, we have 900 dairy farms working all hours to put that fresh pinta on our tables. That number of farms has declined in the years, according to the Scottish Dairy Cattle Association in 1903, with 5,735 dairy farms in Scotland. That is just under 16 per cent of the number of farms that we had 112 years ago, albeit that we did have smaller herd sizes then, with 39 being the norm, where it is now in the region of 170. Those with their sliders at the ready will have worked out that we have went from around 225,000 cattle in 1903 to around 155,000, some 30 per cent of dairy cattle have disappeared. Productivity, genetic improvements, better diets have all helped to increase productivity in the dairy industry, but there is no story here of a rapidly growing industry, but one of many producing and little processing. Therefore, little chance to diversify and make resilient the industry. After all, liquid milk itself, which Scotland mainly produces, has a short shelf life if not processed. Looking further afield at New Zealand, there is one near monopoly of a farmer's co-operative working there. That organisation has some 13,000 farmers as its members and has seen a rapid growth in the number of dairy farmers in New Zealand in the recent past. When in Scotland most of our milk is for the home market, some 90 per cent, I think that the cabinet secretary mentioned, in New Zealand about 95 per cent of their dairy produced is for export. For anyone who knows New Zealand, they will know that it is thousands of miles from any market and that New Zealand has focused on the growing market of Asia, where Asia accounts for 53 per cent of the world's skim milk market and 40 per cent of the world's whole milk powder inputs. That is still growing, although that growth has slowed slightly down. In Scotland, I believe that we are too reliant on the short shelf life market of liquid milk. Our report highlights that we need more resilience in the industry and more diversification of the product. Therefore, more competition in the marketplace and increased resilience to tackle overproduction in the marketplace all make sense to myself. As does any encouragement that we can give for dairy farmers to co-operate and give themselves a better negotiating position than at present. With that in mind, we have to remember that first milk, which, as we all know, was in a position that could not pay the producers which set alarm bell ring with our committee and, in fact, a farmer's co-operative. Therefore, I welcome the key point in our recommendations for the Government to work with our producers and producer organisations to ensure that we do not come to this situation again and that we can build on strengths of our co-operatives. Page 7 of the committee's letter to the cabinet secretary notes that the committee would welcome the Westminster Government to deliver tax smoothing or over a five-year period instead of a two-year one. I am glad that, after the Lib Dem Secretary to the Treasury's intervention on that point, we had that very issue addressed and delivered in the UK budget. I know that that has been welcomed by the dairy industry and, of course, our convener today. During the inquiry, we had a very informative contribution from the grocery code adjudicator or supermarket ombudsman Christine Takwon, one of the best contributions that I think we have ever had at the committee. I do, of course, know that. Of course, ombudsman again was part of the Lib Dem manifesto and has been delivered by the coalition. However, I like that the committee would like to see that role extended to protect more throughout the supply chain and I am sure that we will have support for that point across the chamber for that to happen today. I also welcome the dairy action plan of this Government. Like others, I would like to see some more targeted dates there so that we can measure progress of it. However, it addresses many of the points raised by the committee's investigation inquiry into the dairy industry crisis, including prioritising access to UK retail, which is, of course, important as a home market for Scottish produce. With that in mind, I realise that supermarkets have come in for much flak throughout the inquiry, and much of that is justified, but we do and will have to work with those supermarkets, as well as developing other markets, as they are a major buyer of Scottish produce. With that in mind, I agree with the NFUS that we need clearer labelling of Scottish produce on market shelves. It would be remiss of me not to note that there is a further concern in the dairy industry, which has been highlighted by recent grasslets and which have not to address the effect of tendences when they come up for negotiation. That is landlords who have not claimed CEP payments now doing so in order to gain the greening payments immediately and single-farm payment paid to them incrementally over the next five years to the full. Therefore, I would appreciate if the cabinet secretary would address that in summing up and state how he will tighten eligibility criteria, otherwise we shall see the deathnail in the coffin of any tenant-to-dairy farm or other type of farm in Scotland. South-west Scotland, in the region that I represent, is a significant part of the country's milk field, so it is partly not surprising that the last NFUS meeting with parliamentarians in the south-west of Scotland, which included Alex Ferguson, focused very much on the difficulties faced by the dairy sector that we have discussed today and which, in terms of the price of liquid with milk, are very grave. The current crisis has, however, made us all focus on solutions that, if reached, will make this sector of our agricultural industry stronger in future and share in the success of Scottish food and drink generally. The Government's commitment to launching a Scottish dairy brand is particularly to be welcomed. The cabinet secretary's very firm timeline for the launch of the brand at the Royal Highland show in June is particularly encouraging. Mr Gibson and his committee point out that our home producers could do a lot better in the domestic market for dairy products other than liquid milk, and I think that there is consensus on the fact that we must diversify to compete. However, it has not always been the case that Lourpac and Cathedral City were the first choice of Scottish shoppers. They have grown to become brand leaders, a phenomenon that reflects the rise of supermarkets and the rise of competition and choice for consumers. Many will be shocked at the evidence to the committee from the UK groceries code adjudicator, who said that she had reasonable suspicion that Tesco was delaying payments to suppliers and asking for payments for shelf positioning. Morrison has also indicated to the committee that bigger brands could put together what it called a package of support for products in supermarkets, but it was not made clear what that was. Clearly, it is not something available to smaller Scottish brands. Farmers, I have spoken to, are very frustrated by the supermarkets' failure to properly promote Scottish produce on shelves. They particularly ask that produce should be supported on shelves that are on the eye line of the customer, and they want to see dedicated shelves of Scottish branded products that also include discounted items. It is up to the supermarkets to deliver, and I hope that the cabinet secretary will show them a very firm hand. Finally, I want to talk about investment in processing, something that farmers have raised directly with me. I know that the action plan commits to the deadline of this December to, I quote, seek to encourage new investment in the processing capacity. My constituents in the sector would welcome much more detail on this. Dairy farmers have been very clear to me about the need for significant investment in processing in what is now a very high-tech industry, and in particular they want to see investment in a state-of-the-art dryer. In the south-west, many working farmers are originally from Ireland, and perhaps that makes them more aware of developments in that country. They have drawn my attention to a massive investment by the Irish Government and Glanby Ingredients Ireland, GIL, at a new facility in Bellevue, County Kilkenny. It represents a joint investment of around €150 million and will create 1,600 direct and indirect jobs by 2018. That has been done precisely to allow the Irish dairy farmers to move forward now that milk quotas are gone. It will have a capacity to manufacture more than 100,000 tonnes of nutritional dairy powders in a year, and it will be one of the largest, most advanced facilities in Europe, with a capacity to process more than 700 million litres of milk per year. Significantly, of course, it will have dryers. The technology dairy farmers tell me that we desperately need to invest in. The NFUS briefing offers some answers as to why we are behind an investment in processing, notwithstanding the welcome announcement from Graham's and Sterling today. It notes that the Scottish dairy processors find it difficult to diversify their portfolio due to the decreasing margin that they make at retail sales, which strikes me as a truly catch-22 situation. Also, the NFUS processors have attempted to invest in infrastructure numerous times by approaching third parties to secure capital for co-ventures. They claim that those deals have often followed through or have been held back by local authority planning rejections or lack of support from Governments and local authorities. However, they give no specific examples. I would be very interested to hear if the Cabinet Secretary could shed light on that statement and if he shared the view of NFUS. This is a consensual debate, and I welcome the cross-party commitment to help the industry. However, the point has to be made that the Republic of Ireland, despite all its recent difficulties, has been able to make a significant investment to allow its producers to compete in an international market. How can this be? Is it because Ireland, as an independent country, has more freedom to decide its priorities? Or is it because, as Sarah Boyack observed, the industry in Scotland is controlled by companies based out with Scotland? Or is it something that we can do now, as the NFUS seems to suggest? As I said, this is a very specific proposal from farmers in my area who believe that investment in the state-of-the-art dryer and further processing would transform the sector's fortunes. I would therefore be very interested to hear the cabinet secretary's thoughts on this matter and his closing remarks. I warmly welcome the work carried out by the Rural Affairs, Climate Change and Environment Committee into the dairy industry. I congratulate Rob Gibson and his committee for their comprehensive report and insightful recommendations. I played a small and insignificant role in the proceedings as I attended one evidence section as a substitute. Although there is only an extra for the day, I appreciate the work carried out by the committee and the insights provided by the witnesses that I listened to on that particular morning. Representing a region such as the Highlands and Islands, farming has clearly been a frequent topic for e-mails, letters, phone calls and, of course, attendances at surgeries. Perhaps I could just make one reference to say in the last session that I met Mr and Mrs Mundell of Contire, who had been dairy farmers for over 40 years. They described first-hand their love and their passion for farming, but also the heartbreak of having to kill most of their herd as income was dropping and they were running the business at a loss. They had specific problems with their milk quota, which I'm sure we'll be glad to know. I won't go in at this stage, Presiding Officer, but it did lead to a petition to the Petitions Committee. It does illustrate the very difficult position that many dairy farmers face on a day-to-day situation. The committee report clearly outlines why the industry is experiencing major change, and many members earlier have outlined that analysis. The number of specialist dairy farms has halved and dairy herds have decreased. The production levels have remained consistent for over 20 years. Many members have talked about the global challenge, which is stark and clear. Milk supply is increasing at a time when demand is declining, mainly because of the Russian import ban and a slowdown in the Chinese market. That, as the convener outlined earlier, has all the ingredients of a perfect storm to climbing farm revenues because of lower production, shrinking market and the nexus of liquid milk. Time does not allow me to focus on the many important issues raised in the report, such as the role of first milk and the relative power of supermarkets in terms of their negotiating strength. However, it strikes me that it is appalling that well-organised and efficient dairy farms such as the Mandels, which I referred to earlier, are paid less than the costs of milk production. As NFFU said in its briefing, in areas such as Campbelltown, dairy farms represent around 70 per cent of GDP. I would like to focus the remainder of my speech on what can be done, which reflects the positive recommendations in the committee report, the recommendations from NFUS and the eight-point plan that was put forward by Mike Russell to the committee. The obvious and perhaps simplistic starting point is that the price of the product is only one factor, and it is important to look of course at technical efficiency and innovations. Perhaps, Presiding Officer, I could paraphrase the former MD of General Motors when he said, if it waddles and it quacks, therefore it is a duck, in the sense that we know that retail margins are going up and that processors margins are going down. Where is the transparency and what the committee has done is try and shine a light in the dark places across Scotland. What is needed? A number of members have touched on some key points. I would like to run through four or five points, Presiding Officer. I think are the key issues in this debate. The first and perhaps most important to my mind is improving the bargaining power of farmers to negotiate price that they receive for their milk by the creation of producer organisations such as we have in Orkney. That would require of course capital injection and expertise. I entirely agree with him about the effectiveness of producer organisations, but I wonder if he would agree with me that there is a considerable reluctance to recognise or indeed encourage producer organisations by too many processes in the chain. I strongly support to the point that Alex Ferguson has made. I think that that is a key issue of how we go to the next stage. Secondly, I think that it is really important that we invest in high value niche products using cheese, cream, yoghurt and butter for both the Scottish and the expert trade. Of course it goes without saying that finance is the key and I strongly supported the work and the comments from the European Commission for Agriculture and Rural Development. I thought that they were right when they talked about opening up rural development funding for farmers and processors through cheap loans for the European Investment Bank. I wonder if the cabinet secretary can make some reference to that in his wind-up. There is, of course, urgent need for processors to invest in new machinery and we heard that from Mike Russell earlier and we need to increase capacity in areas such as Campbelltown. Clearly we need to review the costs to milk buyers operations for ferry costs and again I would strongly endorse the comments that other members have made about we need to review this urgently. Time is something that we do not have a lot of. I suspect that I am in the same boat as well, Presiding Officer. I also feel that we need very clear country of origin labouring regulations and we need stronger regulation. I think that the work done by the UK Grocery's Code to Duty Care has been good, particularly in the Aquarian to Tesco, but in the next few seconds that I have got to conclude, Presiding Officer, I would merely say that the Scottish dairy industry is vital for our food security and a major generator of GDP across rural and island Scotland and beyond. I do believe in the Scottish year of food and drink. There is great potential for the industry and we must remember that we do have a comparative advantage in Scotland because of our environment and our climate. Finally, I would like to thank again the committee for this excellent piece of work. It is very timely. What we do not have in this debate is time. There are action points that must be explored now. Otherwise, we are going to see other dairy farmers going out of business as we speak. I echo the comments of my colleagues in welcoming the dairy action plan and congratulate the cabinet secretary for his hard work on this. The dairy sector, as we have heard, is vital to Scotland's farming and food industry. The plan could not come at a better time as we celebrate Scotland's year of food and drink. Of course, the plan did not come about by itself. The Rural Affairs, Climate Change and Environment Committee has been also working hard under the convenership of Rob Gibson, engaging with farmers, milk producers, retailers and other bodies such as the UK Groceries Code adjudicator of the National Farmers Union and the House of Commons Environment, Food and Rural Affairs Committee. Our work on the committee, as has been said, looked at the on-going problems facing the dairy industry with the aim of establishing a clearer picture of the challenges facing the industry from farmers through to processors and retailers to identify solutions geared at improving the current situation and prospects for the future. It was unfortunate indeed that some retailers were reluctant to come before the committee. That was discourteous to all those working so hard across the country to produce and process Scotland's milk. However, after threatening to empty chair them, they did co-operate fully with the committee. In the spirit of taking the dairy industry forward and for the good of those involved from producers to consumers, I hope that there will be less reluctance from those retailers in the future. For any plan to be truly successful, we need to be united in our aims. That includes all those involved in the industry in Scotland. I would now like to mention the Scottish Supplier Development Academy, which is running partnership with the Scottish Government and is aligning with the new dairy action plan on access to Scottish dairy products. The academy, which is supported by a grant from the Scottish Government, aims to generate new sales for food and drink businesses by providing expert advice and insight into supermarket trading disciplines. Recent dairy supplier participants in the academy include Connage Highland Dairy, Geporellian Coe, Graham's Family Dairies, Lactillus McClelland, Peter Rayquide, Sands and Rowan Glen. Positively, following their time at the academy, those suppliers have experienced significant sales growth and product range expansion, which is great news. The dairy plan comes after a period of sustained change in the industry, including a loss of specialist dairy farms. Yet production remains consistent over 20 years. Trends have moved towards keeping larger herds, with approximately the same amount of milk being produced from fewer animals. Globally, of course, an increased supply from other countries has meant decreased demand. Prices have been driven down by overproduction and declining markets. Liquid milk has flooded the market. The EU commissioner believes that the current situation is a temporary downturn. However, such comfort will mean little for those hard-pressed dairy farmers in Scotland, which is why the dairy plan to help the resilience of the dairy sector is of such real importance. Of course, some volatility is inherent in the industry. However, the key to protecting the industry in Scotland from such volatility is by looking to try and put policies in place to assist producers, particularly those in remote and island communities where the industry is most fragile. However, those island producers should benefit from road equivalent tariff by the autumn, when it will be rolled out to all remaining west coast routes. Dairy farmers in some of the most remote parts of the country are often sustaining local communities and economies, which in turn provide considerable economic and social benefit. However, those farmers are often not able to compete with others in terms of the opportunity to supply a range of processors and retailers due to their physical location. However, progress is being made. Last year, in response to ambition 2025, the Scottish Government, as we have heard already, established the Dairy Growth Board and the Dairy Hub, the main themes of which are laid out in the Dairy Action Plan. Those include marketing, promotion, supply, support and ensuring that international rules are correct. I am encouraged that the Dairy Growth Board and Scottish Dairy Hub are both now up and running. The increased support for dairy farmers will help to reach the growth target of 50 per cent that is set out in the ambition 2025 report. Finally, as someone who remembers milk breaks when I was in primary school, I think that the time is ripe for developing this initiative in Scotland but with a few changes. A dairy break in the morning could offer flavoured milk and yoghurt too. That would ensure that children are better nourished with an improved ability to learn. An initiative such as this would boost the sales of milk, which would in turn benefit the dairy industry. It is heartening that the Dairy Action Plan includes working with local authorities to increase consumption in schools of Scottish cheese, butter, yoghurt and other dairy products. I have also written to the major retail supermarkets asking if they would consider contributing financially to this as part of their social responsibility and as a business opportunity. We will update you on this in due course. Would not it be refreshing if they all came on board and assisted us? It is also encouraging that the Minister for Health and Well-being supports the provision of milk in schools as part of children's diets but the decision whether this is done rests with local authorities. Some do choose to already offer a milk scheme in their schools but others do not. If they do choose to offer a milk scheme they can make a claim towards the running of that school scheme from the school milk scheme. Apparently 21 of our 32 local authorities claimed in the year 2013-14. Highland council, unfortunately, was not among them so I have contacted them to encourage them to take up the subsidy that is available and introduce dairy breaks in Highland schools so that the children of today can benefit from good dairy nutrition just as I did all those years ago. Many thanks. I now call on Hanzala Malik to be followed by Nigel Don. Thank you very much and good afternoon, Presiding Officer. Please excuse me for being briefly late this today as well. It is a pleasure to speak in the Rural Affairs Climate Change and Environment Committee debate on their inquiry into the dairy industry. Evidence from producers and processors went some way to help understand the issues. However, the reluctance of Tesco, Sainsbury, Marks and Spencer and Lidl to appear in front of the inquiry has been noted. The dairy industry in Scotland is going through a very difficult patch, but the committee noted from the evidence that the medium to long term future of the industry appears to be reasonably bright. The global fall in price of milk means there are ongoing problems facing the dairy industry in Scotland and we need to be smart in how we get back on track. So much so that the producer cooperative, first milk, delayed payments to its members who can ill afford any delay, especially as they are already being underpaid for their products. I welcome the support that the government has offered the first milk as part of the dairy action plan established in March. The first milk is strategically important for the industry, as it includes a large number of Scottish dairy farmers, but also as it is often the only option for dairy producers. As Sarah Boyd said, on many Scottish islands, it is important that they continue to deliver a professional service. However, the letter to the Secretary State notes it is important that lessons are learned to ensure that many support offered is not undermined in the future by poor decision making or mismanagement. Therefore, the Parliament will be watching closely to ensure first milk is properly managed and changes are made where weaknesses have been identified. Given that the retail price margins for milk have increased over the last 20 years from 5% to 35%, while producers' managers have slipped from 39% down to 16%. I was disappointed by the vagueness of the dairy action plan in stating what the Scottish Government is going to do to ensure that supermarkets treat dairy products fairly and promise the Scottish dairy producers. I will be looking out for more details in this subject over the next few months, as time is of the essence and pressures clearly are on the producers. As many of you know, I am very interested in international affairs. I also welcome the commitment to explore the opportunity that the growing dairy industry in Scotland through encouraging exports. However, there is no mention of the committee calling for support the new dairy products in Scotland for British or overseas markets. Presiding Officer, I am now looking for the Scottish Enterprise, SDA, to earn their crust in encouraging overseas sales for dairy products and when eventually they will be accountable for their work. Many of our dairy producers are now facing increasing pressures that there seem to be limited to their product being sold in Scotland and not being encouraged or supported to have a better overseas market. Therefore, I am suggesting to the Cabinet Secretary that he joins me in encouraging Scottish Enterprise, SDA and any other agency that can support us and our industry in ensuring that we find new and better markets so that we can rise above the current situation. One of the biggest problems that I feel our dairy industry is facing is that our dairy industry has not been traditionally encouraged to look for bigger markets overseas. In fact, at one stage I felt the Scottish Enterprise was in fact discouraging small producers by saying that you are not big enough to export overseas. I do not accept that. I believe that Scotland, like many other industries, is in fact capable of doing the job given the challenge. However, one of the things that is missing is that vital sport. Therefore, I will be keen to see if the Cabinet Secretary will agree with me in encouraging the various agencies not only to encourage exports but to actually have benchmarks in which they have challenges to meet. I will expect them then to meet those challenges, reach those targets so that they can actually demonstrate that they have been successful in actually doing the job given to them in the first instance. It is very easy to lay back and rely upon traditional exports. However, Scotland is a growing nation. We are now on the global scene better than much before. Our marketing internationally is strong and therefore we need to follow that up by deed. We need to make sure that our industry is supported so that we can actually carry the brand internationally. Thank you very much, Presiding Officer. I now call on Nigel Don to be followed by Rhoda Grant up to almost seven minutes. Thank you, Presiding Officer. I am grateful for the opportunity to contribute to a debate, which I am sure many of the farmers in my constituency will be concerned about, because, although we are predominantly in our arable community, there are a number of dairy farmers up there. I would also like to start by congratulating the Rhoda First Committee on its quick inquiry. Something that does not happen very often, it was obviously very important. I think that it is very much appreciated that the subject was looked at very speedily, very comprehensively and with such good results. It comes as a surprise, I suspect, to me to reflect and to others to learn that one of my earliest memories is actually of a dairy farm, because my parents had some friends with a farm in Dorset. I remember as a very wee lad sitting on a what I suppose would have been in an alcove in a cow parlor, watching these cows. I was probably five foot off the ground that I imagined with hindsight that one of my parents was very close by, but it struck me at that point that it was a very precarious position, firstly because I was a long way off the ground by my measures, and secondly cows were very big. Possibly this is an extremely good training for being an MSP, which is precarious at the best of times. I would like to reflect on the fact that there are some short term things that the Government has clearly got in mind, but the longer term things are, I think, the more important ones, providing, of course, that we get through the short term. Mention has been made of freight fares. Clearly that is a huge significance to those who are physically in a position where that matters to them, but it is a short term solution which needs to be brought forward and I echo the comments of Michael Russell that we really can't be sitting around waiting on this. I'm also absolutely delighted to hear about infrastructure grants to First Milk, and indeed other grants might be appropriate in other places in order to get the processing structure that is needed to ensure the future of this industry. Reflecting briefly, if I may, on the supermarkets, I do think we need to be very careful here. I'm pleased that they seem to have got the message they need to come along and respect this Parliament. I guess that's a lesson they will now have learned, but I think we need to be very careful to recognise that they are large, very competitive organisations and there is really no point in pretending that they're suddenly going to become chummy with their suppliers. They're buying in an international market, they're selling locally, but we do have to respect the fact that they are in business to do business and we shouldn't really expect them suddenly to change the habits of the lifetime which we as consumers expect them to keep with, which brings me to the longer term in this, Presiding Officer, because it seems to me that what this industry needs to do is to understand that it needs to add value. It doesn't perhaps much matter what that value comes from, but let me stick with cheese just for a moment, because in many ways milk, liquid milk, is perhaps the by-product. It's obviously the starting material, but it's the ingredient that you finish living with at the end when you've nothing else that you can do to add value to it. When I looked on the supermarket I could find mostly cheddar. I'm sure it wasn't made in Cheshire, which is where cheddar is. It was coloured, it was not coloured, it was strong, medium, mild and possibly other variants as well. Why is there so much cheddar out there and so little else? I find myself, I have to plead personally, I much prefer crumbly Jesus. I'm one of those people who likes to think that he could distinguish between a Wednesday day of Cheshire and on Lancashire, but those would not have to come from the north west of England. They could, I would suggest, be made in Scotland with Scottish milk. I make simply the plea that the industry might consider whether there are some other opportunities to add value to Scottish milk in Scotland. Of course, and this point has been made before, sell it in Scotland, which brings me to what I think is actually the crucial point that emerges from all of this, which is labelling. We have heard several tales from people saying that they believe that they are buying Scottish products when, actually, largely it wasn't. Clearly, the basic ingredient could have been created, like milk in Scotland, the product could have been processed in Scotland, it could have been packaged in Scotland, it could conceivably just have been labelled in Scotland and as consumers we really cannot distinguish. I do suggest that we need, as a nation, to address the issue of what that labelling means. Maybe the Scottish label should come with some percentage of gross added value in Scotland as a number. That sounds a little clever, but it might be what you need to do, because if most of the GVA came in this country then it doesn't matter if some of it was done elsewhere, if actually very little of it was, then probably it shouldn't be regarded as Scottish, even if some part of it is. I leave that to those who consider those things in more detail. However, in summing up, I welcome the Scottish Government's swift response to the committee's swift inquiry. I note that, for some producers, time is now of the essence and I hope that we will get some very quick solutions to some of that. I now call on Rhoda Grant to be followed by Stuart Stevenson at seven minutes, please. Can I too welcome the Rural Affairs and Environment Committee inquiry and indeed its recommendations? This debate is important to the dairy industry, however it has implications for the nation's health too. If the current situation continues, there may be a time when producing milk in Scotland is no longer viable. Already we see farmers producing milk that sells for less than it takes to produce. The situation is untenable and if the dairy industry is to be saved, we need to act now. If the dairy industry is threatened, it threatens the availability of fresh milk, something that is vital to health, especially in children, in order to help them to develop strong bones and teeth. A lack of milk can have health implications going forward, and therefore the debate has much wider ramifications for the nation's health. Therefore, it is not just a problem for dairy farmers but a problem for us all. We have seen the recent rise in cases of rickets reported, and milk is an important tool in the fight against such conditions. Many speakers have talked about first milk and much has been said about the management of the organisation, a producer-owned co-operative, which was set up to help dairy farmers. I cannot understand why our enterprise companies have not been in a position to offer assistance to the co-op, helping them in supporting management to meet the needs and challenges of the industry. They need help to access new markets to manage sales and supplies. They also need assistance to grow and develop local processors who use raw milk and add value to the product. It is sad that we only seem to be able to produce cheese in Scotland when there is a market for so much more. For example, as other speakers have talked about, spreads, yogurts and the like. Those products are in demand, but few are produced here. I thank Rhoda Grant for taking intervention. In terms of her comments regarding first milk or indeed any company not having support from Scottish Enterprise, can I reassure the member that support is available for companies but they have to ask for it? Clearly, if the companies do not approach the agencies and ask for appropriate support, the companies are allowed to go on with their business. It is helpful to have feedback from companies so that the Government and our agencies can make help available in the first place. I hear what the cabinet secretary says, and I sincerely hope that first milk will approach the enterprise agencies looking for that support in developing products and marketing. Indeed, I welcome the money that has been made available for them for the Campbelltown facility. Producing value added products locally keeps that value in our communities. If it is done close to the producers, it also has an impact on transport costs that can be lowered or indeed covered by the much higher value products that are being shipped out. Local products can also earn a premium. Excellent local products can be found again in the Highlands and Islands. As Angus MacDonald mentioned, the Connage area in Ardersea is wonderful local produced cheeses that have become a magnet for locals and visitors alike. Indeed, as I mentioned before, the Campbelltown creamery produces great cheese and now it appears to be stocked in the local supermarkets, thanks to the local NFUS branch in Contire. I am bringing forward their Contire Cheese Yes, please campaign. It took so long for local supermarkets to stock the product. Indeed, I hope that many more local shops will do the same, because we need local producers to supply not only to local shops but also to local hotels, because people coming on holiday obviously want to taste local produce. As other speakers mentioned earlier, we also need to look at ways to supply the public sector to schools, hospitals and so on. First Milk also needs to explore the markets in order that the co-op can thrive and support the industry. I hope that the Scottish Government can do that to help. Indeed, I hope that they ask for that help. It also appears that organic milk retains its premium and surely again help for farmers to change to meet the demand. It is also a job that enterprise companies can assist with. That said, at the end of the day, we need to ensure that the price paid meets the production cost of milk, because anything else is untenable. The EU does have a scheme, as others have mentioned, that assures a price, but that is placed at £15, which is about half the cost that it takes to produce a litre of milk, and that would not keep producers in business for any length of time. The area that is most impacted by the crisis in the dairy industry lies within my region, and as many people have mentioned in the debate, there are gail islands in the area around Cambleton, which can be as remote as an island given the length of the peninsula. The additional costs of producing on buter are around £120,000 and GIA £29,000. Most of that is very cost, putting a huge burden on the dairy industry in these islands. The argyll islands would have benefited from RET and commercial vehicles in the near future, but unfortunately the Scottish Government scrapped that before extending RET to the argyll islands. RET was intended to equalise the costs to the islands. To do that in a way that appears to support the local economy must include RET on commercial operations. It is in the Government's hands to do something about that. It is hard to speak in this debate but without having a word about the supermarkets, and they need to be more responsible to producers. They should not be allowed to use their size and buying power to put small producers under such strain. They should act with social responsibility and, if they cannot do it willingly, we need to use both consumer pressure and, indeed, Government pressure to bring them into line. Many speakers have pointed out how the supermarkets are using food labelling in a way that can be misleading. It is really important that we look at that because products that are made with Scottish cheese and processed in France are not Scottish products. We need to look at the use of the salt tyre. Food Scotland and consumer protection have a role to ensure that food is labelled in a way that is not misleading. Packaging needs to show clearly where the product was produced and processed, and we need a Scottish milk logo to allow customers to support their local industry. The situation in our dairy industry is dire, but there are things that the Government can do. It needs to act quickly to protect the industry. I now call on Stuart Stevenson at seven minutes or thereby please, after which, move the closing speeches. Thank you, Presiding Officer, unlike others, milk is very much woven into my personal history. Dave Thomson referred to the dairy break. He is not that much younger than me, so he probably remembers, as I do, the third of a pint of glass bottles that came to the school for us all at our 11 o'clock break. Of course, the reason that was done paid for by the Ministry of Food that existed after the war and through the war was for health reasons. It was to promote health and good eating habits. I have to say that the quality of the milk in Castle Hill primary school in Cooper I can make references to it. It is not there anymore. We are not greatly improved by the creative milk sitting next to the radiator. The curdling was well under way by the time it reached the pupils' mouths at 11 o'clock. Perhaps it did not have that positive effect that it might otherwise have had upon us. However, of course, milk not reaching its markets in the condition that is required is something that has been touched on in the debate. I certainly recall my father as a country doctor in circumstances where there was too much milk on the farm. The farmer's wife would make crowdy in the kitchen, and the crowdy would come home with my father. Now, it is almost impossible to get a hold of crowdy only. Our late member, Jamie Ston's company in the far north, seems to get any of that into our supermarkets. It is clearly not the crowdy that I quite remember. It is not as moist and as luscious as the stuff that I remember the local farmers making. There ought to be a market for bringing back that as a piece of nostalgia food. Yogurt, of course, has been referred to. I can actually remember where I had my first yogurt. It was on the pier at Cacubrie in 1966 in August. It was made by one of my fellow sailors who were attending a regatta. It was absolutely terrific stuff, and I got addicted to the extent that, when we were back down the former First Minister and myself in 1997 campaigning, we visited the Rowan Glen factory in the south-west, who produced then, certainly, what was the best yogurt in Scotland, because they used a microfilter system to make it creamy and smooth rather than putting additives in it, which contributed to not quite such an effective taste as you got elsewhere. Talking about the south-west of Scotland, Stuart Jameson, in an article herald today, as a dairy farmer in south-west Scotland for 40 years, I watched large dairying estates such as Stair, Bute and Beclew, decline due to lack of investment with farm steadings becoming increasingly outdated. The dairying owner occupiers close by have become prosperous businesses with modern buildings. Investment is one of the keys to economic prosperity. Would you agree that talk of efficiency in the dairy farming industry is also tied up with investment in fixed equipment by Landlords? The member makes a very good point. I remember that we used to go camping to Fascally Farm just north of Bitlochry. I remember the excitement when I went into the milking shed to see the first automated milking machines. Of course, that was because the farmer owned these farms and felt that it was worth investing on them. Later on, as we went to Argyllach, just down from the Queen's view, he was a tenant and could not afford to do so. I very much welcome the fact that I think that there are probably three of the objectives in the Government's response are about investment, getting the enterprise industry involved. I hope that farmers get certainty for the return from the investments that they make in improving the efficiency and effectiveness of their milking operations. Rhoda Grant referred to rickets and the mitigating effects and preventative effects of milk. That is absolutely true, but there is more than that as well. It is important particularly for females who are affected more by hormonal changes later in life. If they have good bone structures, they suffer less from those effects later in life. Milk is an important part of building good bone structures early in life and continuing to drink its sustains forever. I have to say personally that having done a lot of international travelling to many different places in the world over the years, it is interesting to compare and contrast the standards to which milk is produced elsewhere. In many of the places that I have been to, one of the very first things that I like to do when I get off the plane is to get a cold glass of milk, because I may have been away for three or four weeks and not felt that I was able to drink a cold glass of milk in safety. The standards of production in those islands—not simply in Scotland—are very high. I love the Indian drink Lassie, which is a liquid yoghurt, particularly Lassie sal, because of course the way that it is made means that I can trust it, but I am not so sure that I drink milk otherwise, produced in some countries beyond Europe. We have a good-quality product that delivers more value than perhaps we have heard talked about in this debate. It is something that, when supermarkets sell it below cost price, they are not doing so for altruistic reasons. It is a commodity that is widely bought and widely sought after. When a supermarket sells a product like milk, which is a staple bought relatively frequently at lower than their cost price, they do so because they make profit elsewhere. It is time that the supermarkets looked at sharing that wider benefit that supermarkets derived in increased footfall and increased profits across other products, with big margins, that having milk available that is of good quality, locally produced and valued by consumers delivers to supermarkets. Of course, the dreaded word subsidy comes in. We provide support to our farmers, our dairy farmers and other farmers, but when the townie comes to the country, what they see is the product of our supporting our farmers and it is valued by urban dwellers. Urban dwellers are prepared to support our farmers just as we in the countryside need support for our farmers. I think that this is a very useful and timely debate. The committee is to be absolutely congratulated on their endeavours and the flexibility and speed of their response to the crisis created by First Milk. I continue to drink milk. I continue to enjoy milk. I hope that we have the kind of infrastructure and economic support for this industry. That means that I can continue to do so for the rest of my days. I am pleased to close today's important debate. I think that it is very right that our Parliament debates these serious issues and sends a unified cross-party message and support to Scotland's hard-pressed dairy farmers. I restate my party's strong backing for the dairy sector, as Alex Ferguson did. I welcome both the Rural Affairs Committee's dairy inquiry and, in general terms, the Scottish Government's dairy action plan, at least in so far as it goes. However, we have heard today of the very severe challenges facing those dairy farmers contracted to First Milk. Those include my dairy farming constituents in Kintyre, in Gear, where, as we have heard from Rhoda Grant, the extra transport costs are £29,000, and Bute, where they are £120,000. These are fragile rural economies where the dairy sector is critical to the local economy, as Michael Russell said in his contribution. Milk costs the farmers about 30 pence per litre to produce, but some First Milk suppliers are receiving 18p or even done 15p, we have heard, which means massive and unsustainable financial losses for many farm businesses. I would wish to commend the actions of Mount Stewer to State on Bute, who have taken positive steps to alleviate the dairy crisis on the island of Bute, and Michael Russell outlined those in some detail. I am glad that the Bute state has stepped in. However, the point is that, if it lost any more dairy farms, it could end the industry in the area, but also that sheep farms have far lower rents. If we are making that point, I would like to get on now, if possible. The financial pressures facing First Milk itself are well known, and all of us want to see First Milk back on a sound financial footing, and that must be the immediate priority. We recognise that the Scottish Government has said that it is committed to helping to support First Milk to transform its operation in Scotland, and we welcome that. The dairy action plan suggests that the Government will support First Milk to provide capital investment in Campbell time. I was glad to hear what the Cabinet Secretary said about that. He mentioned £450,000, and I think that that was available in the next few weeks, if I am correct. However, investment is badly needed in new boilers and increased capacity. Local dairy farmers are looking for more detail from the Scottish Government on the level of assistance and the timescales for the delivery of it. Other members and the Rural Affairs Committee's inquiry have also raised the issue of the high commercial vehicle ferry costs to uplift milk, and I explained what they were on butane gear. I agree with local dairy farmers that the Scottish Government should intervene on this matter without delay and provide those dairy farmers with practical and immediate support, certainly before the October dark target set in the dairy plan. The NFUS has expressed its disappointment that it had to wait until October for that. Perhaps the Cabinet Secretary might address that point. In terms of the Orkney dairy sector, I back calls for the Scottish Government to do whatever it can to support the co-op for Orkney cheese production. The co-op is facing a crossroads with production dropping from 16 million litres to 13 million, so producers need backing to allow them to reinvest. We must retain critical mass and capacity in Orkney, which has such a deservedly strong brand, which the people in Orkney have worked so hard in the past to produce. Anybody who has been to the Orkney show will know what I mean about the quality of stock and farming produce that exists on that island. Many members have talked about local product placement and marketing, and I agree with much of what has been said. Last week's Campbelltown courier had a story headlined, Delight, as Mull of Quintar brand is back on supermarket shelves, referring to the news that the two supermarkets in the town are again now stocking the delicious local cheddar for the first time in years. I welcome this news, but it seems a bit bizarre that Quintar shoppers have been unable to buy locally produced cheese from their local supermarkets. I don't believe that this would happen in France or Holland, so it shouldn't really happen in Scotland. We should be actively promoting local and Scottish produce, and I commend the NFU, Scotland Quintar branch, for the forthcoming Quintar Cheese Yes Please event, which will take place on 7 April. Clear labelling is vital, too, so our consumers know that they are buying dairy products made and processed in Scotland. The cabinet secretary said that today is the official end of dairy quotas. On that issue, I wonder if the minister in his closing speech could address the continuing and genuine concerns of those dairy farmers in the Southern Isles milk quota ring fence who were prevented from selling their milk quota and therefore unable to diversify their businesses. This is still the subject of a current long-running petition at the Public Petitions Committee, as those dairy farmers feel very strongly that their human rights were simply not considered. Quintar is not an easy place to change from one method of farming to another, and it's extremely expensive to do that. We will continue to call on the Scottish and UK Governments to do absolutely everything they can to support our dairy farmers through the present crisis, which has been caused, I suppose, by fluctuating milk prices partly influenced by the current imbalance in international dairy supply and demand. We all need to back our hard-working specialist dairy farmers and ensure that the industry gets through the current challenges so that we retain the producers and processing infrastructure, which, with the right marketing and export support, and by building on Scotland's strong reputation for quality food, has the potential in the future to be an area of growth for our rural economy. I look forward to the Highland show in June when the Cabinet Secretary has said that an exciting project for the Scottish dairy sector will be launched. In earlier times, cheese from the Isle of Coal was digested regularly by MPs in the House of Commons and the Lords. I don't know where this Parliament gets its cheese from. I know that it uses Scottish cheese, but it certainly doesn't come from the Isle of Coal because it's not made there any more. Thank you very much. I will follow that cheery note. I think that there have been a series of excellent speeches this afternoon. I think that if I was to draw out the mood of the chamber, it is very much that most of us have focused on the short term because it is an urgency here. Although there is an importance about talking about the long term, maybe the thought is that we should be focused on short term and then medium term in relation to the promotion of the dairy industry and leave the short term for the future. It is about what we do now and what we do in the next few months. I would ask the cabinet secretary to reflect on that and maybe to have another look on the timelines in his action plan. There is support across the chamber from SNP backbenchers as well as open opposition parties for faster action. I think that it gives him the political support to move faster on some of those issues and to go to his colleagues. All those representing island communities have spoken passionately about the need for faster, more decisive action on ferry fares. Claudia Beamish called for more information on accessibility of the dairy hub and to make sure that that was going to be genuinely accessible for farmers across the whole country. There are some very important short term actions that could be taken. The other thing that several members spoke about was the issue about developing new dairy products and about an ambition for a faster timeline than December to see some progress there. We all support the fact that there is a new dairy process factory coming with grains and sterling. That is really good, but it would be good to look across the country at some of the other creameries and some of the other processors to see who would be best place to potentially benefit from new investment and infrastructure. There has been some good discussion about the grocery code and the importance of the adjudicator, partly about power and partly about transparency. I noted in one of the many briefings we had for the day that the Scottish Retail Consortium challenged our use of statistics in our report where we tried to pin down the margins in the industry. I would make the point that it illustrates the very difficult challenge that we had of establishing transparency, and it remains an issue where both the adjudicator and the code could be helpful in enabling that transparency. Nigel John made the obvious but important point that it is a hugely competitive industry. People are not going to want to volunteer their costs and to volunteer their margins, but there is still more that we should be able to see from producers, processors and suppliers to retailers. That would help to promote the discussion on where we take the debate forward. There has been 100 per cent support for local produce. I think that several members mentioned the Contire Cheese Yes Please campaign. That is the kind of campaign that we really need across the country to focus regional support, to build up into regional food chains and into the supermarkets and the small retailers, but then to take it to the national level as well. I think that we need to encourage members of the public to be able to ask for those products. David Stewart highlighted Orkney Chedder, Bruce Crawford talked about Graeme's dairy and their butter products. I think that one of the things that we tried to do in the committee inquiry was to build on the experience that members have across the chamber. If you read the official report afterwards, that will definitely come through the comments from Alex Ferguson, Mike Russell, Claudia Beamish and many others about the local work and the discussions that members have had with local farmers and producers. I think that the benefit of this debate is that we have been able to pull it up to the national level. There is strong support across the chamber for new innovative products and we need to think about how we get all of the key players to act in a timescale that we will deliver for the industry. I think that the Scottish Government and its leadership is absolutely crucial in that. Its agencies—SDI, Scottish Enterprise and HI—need to be looking at the existing products that we have and to identify options for growth and to have a hard look at the regional aspect of that so that we do not see the loss of produce from the islands, as was highlighted by Jamie MacGregor. I would like to see more with producer, co-operatives and farming interests to shape that agenda. Maybe we need to draw on some of our academic expertise, particularly in the relation to the issue of food health and general public health and what role the dairy industry can play there. Retailers and the hospitality industry. Quite a few members have talked about hospitality and catering today. If there is difficulty in pinning down prices in the dairy chain, it has been particularly difficult to pin down some of the hospitality industry. Maybe that is something that we should have looked at a bit more in the committee, but I think that that is something that could be looked at going forward. There is a key player when it comes to not just fresh milk but dairy produce more generally. I hope that the cabinet secretary can bring those players together so that, when we have the Highland show launch pad this year, that it really is a step change and that it is something that we can all relate to, that MSPs who are not in the chamber this afternoon would actually relate to if they got a briefing from it and would feel comfortable to lobby in their own areas. The members in the chamber have come up with some very good points this afternoon. It is about how we pool this together. It is about how we make sure that we support our retailing industry. One of my thoughts is in lobbying the retail industry. The discussions that we did have when we got everybody together around the table in committee were really good. It forced people to talk about the practical things that they are doing. I hope that that will lead to more dissemination of good practice. I hope that those who are looking to compete in the retail market will see the benefit to consumers and the benefit to our regional economies of promoting our own brands of using the shelf positioning to promote Scottish produce and particularly to promote local produce. I would make the comment that, as parliamentarians, we can send a clear message today that we think that Scottish produce, regional produce and local produce needs to be properly marketed and it needs to be properly supported. We can learn the lessons from the fair trade movement. It was the fair trade fortnight earlier this month and you can see the massive increase that has been with fair trade products because consumers have lobbied and they have had a response from retailers. We need to get the same thing here in terms of the milk industry. If I want to begin to close, Rhoda Grant was right to focus not just on the economy but on health too. The importance of fresh milk from public health benefits not just from young people and Dave Thomson's points about schools that are well made, breakfast clubs, snacks, school meals, all of them should promote fresh milk. There is also Stuart Stevenson's point as well. It is about the lifelong benefits and the bone protection that comes from having milk as part of your daily diet. We need to make sure that the wonderful industry that we have in Scotland is promoted, supported and sustained and that the work that we have done in our committee pays off, that we have lobbied the minister and that we see that leadership coming from the Scottish Government. We all agree that we need faster action, we need more decisive action and, above all, we need an urgency to this debate so that we can save our milk industry and promote growth in jobs across the whole of the country. I have listened intently to all the very valuable comments from members across the chamber. We are today discussing what is a very unfortunate irony in that we have top-quality producers in this country who produce top-quality dairy products. Yet, at the same time, we have many producers struggling to make a profit. We have the vulnerability that we have seen to global factors that have an impact on businesses in this country, not just the primary producers, right through the dairy supply chain. That may well continue to be the case. We do not know because of the removal of quotas in Europe and the impact that that may have in terms of European production. We also have the untapped potential for greater sales overseas that has been discussed by many members. Likewise, the untapped potential to fill our own shelves in this country with Scottish dairy produce at the same time. We face all those factors at a time when we have top-quality producers producing top-quality dairy products. Addressing that irony is what many members have spoken about today. We have experienced ups and downs in the dairy sector over many years. Of course, the recent decline in the price being paid for milk is not the first. We have experienced that several times in recent years. However, I feel that this time, there is a robust response from the Government, from agencies, from the industry itself and everyone who has a role to play. Hopefully, this time, we can bring about the changes that are required to ensure that those ups and downs do level out over time and that we have a more resilient industry in this country. A couple of years ago, we had the voluntary code of practice that was introduced. We have since had a review undertaken by Alec Ferguson, one of our own members in this chamber. We also had Ambition 2025 published a couple of years ago, and the good work that is now flowing from that through the establishment of the growth board chaired by Paul Grant, not someone from the dairy sector but someone who can bring a wealth of experience and success from another food sector and hopefully lend that experience and expertise to dairy who can also hopefully experience similar success, particularly in overseas markets. Also, at Ambition 2025, we had the establishment of the dairy hub and, as part of that, the appointment of a consultant to develop a Scottish dairy brand. That is new as well. We have had a dairy action plan, the Government published last week and we have now got the committee's report, of course, which is also contributing towards the debate and finding solutions, which we are debating here in Parliament. At all that together, we can safely say that there is a very clear recognition by this Parliament, by the Government, by all the players who have got a role to play, that we have to change things this time. We cannot go on with the on-going volatility. Back at the rally in Lanark in 2012, the Scottish Government found £100,000 to give to the Dairy Farmers Together initiative. If I remember rightly, it was to be delivered through SAOS to develop producer organisations. Now, Rhoda Grant has mentioned them. The whole point of producer organisations was to strengthen the hand of the producer in all of those negotiations. Can I ask what has happened to that initiative and, indeed, that £100,000? Some of the initiatives were taken forward, but, as he knows, there has not been a great take-up of the establishment of producer organisations, which were made possible by the European dairy package a couple of years ago. I want to return to the issue of collaboration and producers working together. There are some clear themes that have come out of today's debate. First of all, there is making the most of the opportunities in their own doorstep to support the dairy sector. In particular, the fact that we have to address, as many members have said, the cheese sold in Scotland. Generally speaking, the best sellers come from it with Scotland, likewise for yogurt, likewise for butter. Therefore, we are working for the retailers to address that. Again, I reiterate my challenge that I know is supported by other members to the retailers in this country to get behind their domestic producers. If you go into supermarkets in Italy or France—I am told, I have been to some but not them all—then you find that these countries tend to support their own produce and you would not find imports outselling produce in some categories from their own countries. We need a similar approach and mindset in this country where our own retailers support our own producers briefly. I thank the cabinet secretary for that. If he knows what the arrangements are in the countries that he is talking about with the retail sector and whether they are taken into the code of practice, which was a suggestion that Alex Ferguson made—a very good suggestion, and I thought—which would produce much more transparency for a long-term solution. I could go on for quite a while, but the difference between the cultures in our countries and these countries is that the supermarket culture is radically different between the UK and many European countries. In other European countries, there is much more loyalty to domestic produce and we have to instill that same loyalty in our own retail culture in this country. Of course, in our own retail culture, there are good players and there are perhaps not so many good players as well. We have some good examples, but we have others that have to improve their loyalty to domestic producers. Likewise, many members have laid out the need for consumers in this country to have more information to enable them to support buying Scottish produce at the same time. Labelling, as many members have said, has got a big role to play in that more accurate country of origin labelling for Scottish dairy produce. The Smith commission laid out the promise still to be delivered that the made in Scotland label will be promoted in Scotland having the power to do something about that and responsibility for that kind of labelling. We look forward to that pledge being delivered by the current or next UK Government and we will certainly make sure that that is the case. Also, the commission, the council of ministers, will be hearing from the European Commission on, I believe, the 20th of April. I hope to attend that and have the Scottish Government where labelling will be on the agenda and, at rest assured, we will continue to pursue Scotland having the power over labelling of dairy produce and for Europe to take more radical action over labelling of produce from the dairy sector as well. Claudia Beamish? I thank the cabinet secretary for that. I am wondering whether, in relation to consumer choices, obviously they need to be informed on the choices, whether the new food standards agency in Scotland, the new body, would be able to be helpful in promoting the health issues in relation to that. Yes, that is something that is being discussed with the new foods body in Scotland in that general remit and we are very keen for dairy to be at the heart of that. In terms of getting the backing of consumers, I want to pay tribute to NFU Scotland for their entire Cheese Yes Please campaign, which I am sure we all want to support. I have to say that we want to welcome Alan Bowie, the new elected president of NFU Scotland in the gallery today for this debate. No doubt to find out what we are saying about the future of his members who are involved in the dairy sector. Those are the sort of campaigns that we want to support and we do need to make sure that the consumer can play a role in getting behind their dairy producers in this country. However, let us not forget that we have discussed first milk, we have discussed Graeums, and Graeums in particular are a shining example of what can be achieved even in our domestic market. We have had a lot of issues raised about the difficulty of persuading our retailers to get back behind Scottish produce. Graeums have shown that they can actually do it and they can actually make good business and grow as a company in our domestic market. Other players in the dairy sector can, perhaps, take a leaf out of the book from Graeums because it shows that it can be done. However, we have to make sure that our retailers, processors and everyone else are paying a fair price to our primary producers. If we do not have primary producers, we do not have the rest of the supply chain. As many members have said, it is untenable for dairy producers to produce milk and receive less than the cost of production. So, while the voluntary code and other measures from the grocery adjudicator can play our own enhancing transparency of what is paid to primary producers, we need to ensure that we get a fair share of every pound that is spent on milk. In terms of collaboration and working together, it is the case in other countries to empower the primary producer much more as done to support primary producers working together through producer organisations or other co-ops. Again, the Scottish Government remains open to supporting more of that happening in Scotland. Ultimately, it is up to the primary producers to work together. We cannot force them to do that, but it is certainly a lesson to learn that it empowers primary producers and that is the experience of other countries. Public procurement was mentioned. I just want to touch on that before I think I am running out of time, but public procurement, of course, is very important. My own remarks are outlined what the Scottish Government is doing to support public procurement of dairy produce. There is much more to be done and our support for local food in this country and the local food revolution has a big role to play in sourcing more dairy produce locally. Our schools offer a potential option for dairy produce. It is something that we will look at. Stuart Stevenson mentioned receiving a school milk and, of course, it was served in bottles. A much posher school than clearly I attended because I received my school milk. I recall primary school and little triangular cartons, which often leaked. The bucket that came often smelt sour milk because, likewise, they were stored next to radiators. There are lots of opportunities out there, but ultimately we have to add value, exploit the overseas markets opportunity and support the processing capacity that is being established in this country. There is support for achieving that. We are open to approaches. We are already speaking to some potential international investors. We can have a more reliant sector in this country. We can have a more profitable sector in this country. The Scottish Government will do utmost to support Scotland's dairy sector. Many thanks. I now call on Graham Day. Mr D, you have until five o'clock. Presiding Officer, when the rural affairs climate change and environment committee launched its inquiry into the daily industry, it did so intending to identify potential solutions to its woes. It would have been certainly obvious to say that the industry was in crisis. It would have served no purpose to do so. Members were clear that, whilst consideration of the reasons why the sector found itself in the situation it does, it was necessary that it was plotting the way forward, which was paramount. Between the work of the committees on helpful suggestions from a variety of sources and the Scottish Government's response in the formerly action plan, I think that we have incorporation found, if not a guaranteed escape route and certainly a means of bringing about improvement in the situation and confidence that we can bridge the gap between the recent crisis and what is predicted to be a brighter medium to long-term future for the sector has surely been helped by recent announcements from First Milk. The committee in its report expressed extreme concern over the situation that it developed there, criticised some of the decisions in management of the organisation and expressed the fear that, unless lessons were learned and the quality of management improved, any support provided could be undermined. I note Bruce Crawford and Mike Russell's comments reminding us of the still negatively developing situation for many First Milk farmers. However, the decision to bring in a new CEO who will, we are told during April, develop a clear plan to restructure the business based on delivering better milk prices for members, confirm progress with the Government on investment in the Campbelltown Creamery and, looking at partnership options with HIE and Argyll and Bute Council, are measures as welcome as they are necessary, because members of that co-operative must never again find themselves in the dire circumstances that many are presently contending with. I do not have time, my apologies. Although the committee's inquiry was conducted rapidly or snappily, as Rob Gibson described it, I think that we did cover pretty much all the bases. If there is a criticism to be leveled at us, then it was perhaps that we did not find an opportunity to meet with Paul Grant, chair of the Scottish Dairy Growth Board. Mr Grant, who heads up Macaiz and preserves makers based in my constituency, has a personal experience of leading a hugely successful company that has made great inroads into export markets, and he is deploying that expertise now for the benefit of the dairy sector, engaging with a number of Scottish dairy processors and targeting entry into a number of new markets this year. We need to crack that and better balance the risk that is faced by the industry. For an evidence to the committee, James Withers of Scottish Food and Drink highlighted the fact that 92 per cent of Scotland's dairy products are sold within the UK. There is no doubt that promoting what we have to offer beyond those shores is part of the solution, especially when, as the cabinet secretary noted, a block of Scottish cheese overseas is realising a financial return three times where it can domestically. Therefore, the announcement within the dairy action plan that the new Scottish brand will be formally launched at the Inuga Food Expo in Cologne and the Japanese and Canadian markets are to be particularly targeted is welcome. However, Robert Graham of Graham's Dairies was surely spot on in likening the dairy situation to football where the foundations of success lie in winning at home. The emphasis in the market development plan in Scotland and the short accompanying timeframe is entirely appropriate. No one, not least of all the members of the rule of affairs committee who is inquiring at the state of the industry, forms the basis of today's debate, would disagree with that. Active engagement with retailers to encourage the backing of Scottish products and Scottish stores, targeting food service and catering companies to ensure widespread adoption of the food charter and best practice and labeling, working with local authorities to increase consumption in schools of Scottish cheese, butter, yoghurt and other dairy products, all steps in the right direction and needed, because it is surely ridiculous that here in Scotland our biggest butter brand is Danish and our biggest yoghurt and cheese brand is English. I think all members of the committee were struck by Robert Graham highlighting the fact that 96 per cent of all spreadable butter sold here in Scotland is not Scottish and mounting to a lost opportunity of £60 million for our economy, our dairy industry and our farmers. Along with this point that in terms of butter we cannot make inroads in England because supermarkets there are selling indigenous products along with some from Wales, Ireland, France and Denmark and we are struggling domestically because those very same products are on sale here. On a more positive note, Presiding Officer, I want as others have to take the opportunity and note how impressed I felt indeed all the committee were by the can-do, fair to farmers, ambitious and imaginative attitude of Graham's, whose bridge of island dairy I visited recently. If the dairy crisis has highlighted shortcomings domestically, it has in the forms of Graham's also allowed a Scottish success story to be celebrated as we've heard today and a genuine Scottish success story. For I think members of the committee such as Alex Ferguson, Sarah Boyack and myself were quite taken aback to put it mildly with what we learned from an NFUS presentation here in the Parliament on the dairy issue, covering the placing of a kilt on certain dairy products. When in reality, which in reality had only a tenuous connection with our country, an example being a Scottish spreadable cheddar which sports a sulta in the tub but which is made in France and like Sarah Boyack I too now look for far more carefully at just how Scottish, apparently Scottish dairy products are when shopping. Graham Kilpatrick, chair of the NFUS milk committee, was quite right when he said that retailers need to wake up to the fact that Scottish consumers want and expect to see Scottish dairy products properly labelled and identified on their shop shelves. In fairness to the retailers, they indicated to the inquiry that they would welcome an acceleration of the timetable to extend country of origin labelling to dairy products. By having voice support for the position of the NFUS in regard to acric label, I do not want to note in passing a concern. This is a personal view, not advanced on behalf of the committee. Once again, when the farming industry runs into trouble, it seems the answer, at least in part from the perspective of the NFUS, is to expect the Government to intervene. Having a vibrant, prosperous dairy sector matters to Scotland and do we cannot, and with a 25-point plan having been brought forward? One moment, Mr Day. There is far too much noise in the chamber, particularly to those members who have not sat through the debate. Will you please be respectful both to Mr Day and to the people who have, Mr Day? As I said, we cannot, and with a 25-point plan having been brought forward, clearly will not stand by and watch it fail. Support for our island farmers in particular is vital, and the investment in the Campbelltown creamery announced today is extremely welcome. In the broader sense, while the dairy crisis has mainly been precipitated by issues outwith the control of the sector, George James and the NFUS admitted in evidence to the committee that there was also a specifically Scottish factor at work, that there was a particular lack of modern investment in Scotland, both in terms of processing and marketing, and that did not just happen overnight. I hope that the NFUS, under new leadership as it is, will ask itself what in that general sense its role going forward should be, whether rather than reacting to crises when they arise by demanding action from government or they seek to influence the relevant parts of the industry to get their house in order before the crisis has reached, and to be fair, there have been some positive signs in over recent days. Presiding Officer, I am conscious of time. I have one minute and 30 left. Thank you very much. There are aspects of the committee's report and the Government's action plans that I have been unable to cover in this summer opera, which I apologise, but I need to move to concluding, and we will do so by thanking everyone who contributed to the committee's inquiry and expressing in the hope that those supermarkets that were so reluctant initially to engage with us will, having read the report of the committee, realise that we will never out to monster them, although it should be said that the revelations of Christine Tacklein did little for the image of the sector. As we acknowledged in our report, they did ultimately provide informative and helpful evidence to us. However, we do expect that they will come good on the various commitments that they gave to being willing to give consumers fair access to Scottish dairy produce. Chris Brown of ASDA gave an example on evidence involving six new dairy suppliers coming under their supplier, a carryman brillancing at 300 per cent increase in average sales. When we get the right products in the right place, the right customers, the sales are there, he said. So coming good on the commitments that they made will pay off for the supermarkets and the supply chain, leaving everyone the winner. As the committee concluded in its report, we want everyone involved to work towards a sustainable, equitable and profitable dairy sector in Scotland, where all producers are paid an appropriate price for the goods they produce and where customers can make informed decisions about what to buy based on clear information about where produce comes from and how much it costs to produce. That concludes the debate on the dairy inquiry. The next item of business is consideration of two parliamentary bureau motions. I ask Joe Fitzpatrick to move motions number 12862 and 12863 on approval of SSIs. The questions on those motions will be put at decision time to which we now come. There are three questions to be put as a result of today's business. The first question is at motion number 12849, in the name of Rob Gibson on the dairy industry inquiry, be agreed to. Are we all agreed? The next question is at motion number 12862, in the name of Joe Fitzpatrick on approval of an SSI, be agreed to. Are we all agreed? The next question is at motion number 12863, in the name of Joe Fitzpatrick on approval of an SSI, be agreed to. Are we all agreed? The motion is there for a great too. That concludes the decision time. We now move to members' business. Members who Felly mae'r ddechrau, mae'n ddod yn gwyllt i'n mynd.