The multiple and often conflicting challenges of truly sustainable food production are not to be underestimated.

The dairy industry is challenged with producing high-quality food at a competitive price, maintaining high animal welfare standards, complying with burdensome environmental legislation and making a profit that provides for a properly invested future.

On the farm, the challenge will be to improve performance through greater efficiency, especially feed conversion, while adopting latest technology. Processors will in turn need to encompass strong farmer relationships through proper transparent, flexible and tailored contracts. If successful, these would then form a seamless chain from retail shelf to farmgate.

British dairy farmers are ready for the challenge, but if we are to be successful, a proper partnership throughout the supply chain – with openness, honesty, and a fair distribution of money, allowing each link in the chain to be profitable – is essential.

We will continue to raise our performance in line with consumer demand. In return, the very least we can expect is for consumers to benefit from reliable labelling that encourages informed choice, with the Red Tractor occupying a prominent place on the front of pack and not banished among the small print on the back.

Appropriate and clearly visible labelling is essential, because many British consumers want to buy British and are concerned about traceability, animal welfare and environmental practice.

In 2009, we should concentrate on securing that vibrant, positive, and profitable industry we all wish to see in the long term. Restructuring and consolidation of British dairy processing has been slow – the news that the European Commission has approved the Campina Friesland merger serves as another painful reminder of what could have been in the UK dairy industry.

There is a danger that we are too focused on our own marketplace, lacking ambition as an industry to export products competitively. British dairy farming has the climate, the farm structure, the farm size and the expertise to compete with any country in Europe, and this has been demonstrated over many years if one compares farmgate prices.

‘Organising’ margin by deducting from the dairy farmer at will has to change. Proper contracts are at the heart of the partnership approach, which has the capacity to move the industry on.

We need an industry that is based on trust and fairness, where each link in the chain is working towards a common aim. That aim is to give the consumer the highest quality British product at a fair price, at the same time ensuring a future for each link in the supply chain. This cannot be achieved unless we move away from unjustified cuts in milk price, such as the one Arla foods imposed without negotiation on its farmer suppliers earlier this month.

Faced with nitrate vulnerable zone compliance, a worsening TB situation, low calf prices and gloomy commodity markets, dairy farmers need to feel that an offer of proper partnership exists, in order to restore confidence.

If this can be done, the British dairy industry has the potential for a bright future.

Gwyn Jones is dairy board chairman of the National Farmers’ Union.