CURRENCY interaction and existing CAP support policy are firmly linked to UK milk price volatility and must become priorities for policy makers if prospects for dairy farmers are to be improved.

This is the main conclusion of a paper by Neil Davidson, chief executive of Express Dairies, and Dr Clive Black, an independent analyst.

The pair point out that under current arrangements, dairy farmers are severely disadvantaged in comparison with their EU counterparts and that the CAP is failing in its objective to provide a meaningful price floor in the UK market.

rrency fluctuation was rightly identified as one of the key factors affecting UK milk prices in the MDC's review and we concur fully with this finding," said Dr Black.

"Price volatility and, in particular, the periods of dangerously low pricing seen in recent years have frustrated dairy farmers, drained the industry of confidence, and made long-term business planning very difficult. "