Milking shoppers, and for what?

MY HOUSEHOLD, dominated by children, runs on milk in much the same way that cars run on petrol. We must be a dairy farmer's dream. The baby glugs down four bottles a day, milk is freely splashed on cereals and muesli. And that's before I even start to count the pots of fromage frais, yoghurt and wedges of cheese we munch through.

This is why I've been so taken aback by news of the Government's great milk shake-up. We may think we live in a society drenched by too much information. But the all too real threat of higher prices came to me, a conscientious media watcher, as a complete surprise. Don't we know more about the plight of Cuba than the sour politics of pricing the daily pinta?

Agricultural specialists agree that there has been far too little general reporting on what is a really explosive consumer issue, touching all our pockets. Abolishing the out of date Milk Marketing Board and its astonishing 61-year-old state monopoly may have been under debate for the past six years. But you would have needed to be a reader of Farmer's Weekly as well as a devotee of The Archers (which I'm not) to grasp all the implications. Yet William Waldegrave, the Agriculture Minister, who is currently being intensively lobbied by dairy companies, supermarkets and farmers, ignores at his peril the fact that milk, the food of infancy, with its white, simple purity, remains a very potent symbol to ordinary people.

In the course of researching this article I've had quite a few shocks: it is a fact, for example, that the business of getting milk from farm to fridge is so complex that even the experts admit to not understanding things. But it is also obvious to any Briton who ventures into the countryside that the UK, with its plentiful rain and pasture, is an ideal place to bring up happy cows when compared, say, with southern Italy.

Yet although we could be self- sufficient in dairy products, we aren't, producing only 80 per cent of our needs. In part, this is a hangover from our days of Empire when the colonies of Australia and New Zealand sent us butter and cheese in return for our manufactured goods. Since 1984 the EU-wide system of quotas, designed to melt down butter mountains throughout Europe, has reined back production further, stunting our ability to innovate by making, for example, new soft cheeses to cater for the middle-class Sainsbury shopper.

This shortfall, which we are locked into unless the CAP is abolished, helps to explain something that has long puzzled me: why so many simple products such as yoghurt and unsalted or semi-salted butter are imported from the Continent. French fromage has apparently seized the top end of the domestic cheese market, while Dutch Edam satisifes the bargain basement: the result is that, according to the National Consumer Council's head of policy, Robin Simpson, 'some of our hard British cheeses are undiscovered treasures'.

Since fresh milk for drinking is both perishable and too bulky to travel long distances, our domestic arrangements are geared towards satisfying this daily demand first at a premium price. The dairies who process it come second. Except, and here's the twist, although milk is milk when it leaves the udder, it has always been priced differently by the MMB, depending on whether it is heading for a bottle or a cheese. (Drinking milk has attracted the top price.)

And since in a new, freer market, competition for this too- scarce milk is intensifying, prices are set to rise and eventually equalise in a single milk price. One of the few firm facts in the propaganda now being pumped out by all sides is that the prices paid to farmers supplying milk for cheese will rise from 22p a litre to 24.6p, an extra 11p per pound of cheese.

Now there could be a potentially positive side to the changes, which allow farmers to sell direct to dairies, supermarkets or even organise milk rounds themselves, without penalties. More Loseley- style operations could spring up, proudly marketing their especially tasty milk, quality brands of cream, real ice cream, or regional cheeses. We might have Sunday deliveries.

But the basic problem remains that the Government has launched another bit of privatisation without appearing to protect the consumer adequately. It hasn't even tried to phase in such massive changes, the backlog of 61 years, with any sensitivity. In part, its problem derives from the fact that some 70 per cent of dairy farmers have opted, probably sensibly from their point of view, to join the free-market alternative to the MMB, Milk Marque, (which itself will consist of 300 people who used to work for the MMB). But surely the Ministry of Agriculture has had enough experience of the herd instinct of farmers to predict this and frame policies accordingly.

The most striking point, perhaps, is that no one I have spoken to really knows what the long- term price effects of the free market in milk will be: only that sharp price rises for UK-produced cheese and butter seem inevitable in the coming year. So is it any surprise we have become a cynical nation accustomed to expect the worst from even long overdue reforms? Once again, ordinary consumers seem set to shoulder the burden. It is wrong.