The UK government has outlined its opposition to any attempts to restore cash subsidies to Europe's ailing dairy sector, and claimed its own sector is already "modern and efficient".

The announcement follows protests in Brussels last week involving 5,000 dairy farmers from France, Germany, Belgium, Austria, the Netherlands, Italy and Luxembourg. Organised by the European Milk Board, it was the culmination of weeks of dairy protests across Europe over low prices and incomes.

The demonstrations came as EU Ministers of Agriculture were meeting to discuss the milk market crisis.

The EU Commission had proposed to the ministers the formation of a 'high-level group', whose remit would include working on contractual relations between milk producers and dairies with regard to balancing supply and demand, on strengthening the milk producers' position, and on the introduction of futures markets.

Romuald Schaber, president of the EMB said: "The politicians have taken a step forward today. But it is by no means far enough. The working group they proposed must be enlarged by representatives of the milk producers and become a permanent institution."

A spokesperson for Defra however, told just-food: "A lot of the protests in Europe are because they want more subsidies. What we are saying is that in the UK, our sector is quite modern and efficient and a lot of producers in the EU countries are way behind that."

He added: "We don't want to continue to pay farmers for milk for which there is no demand. If we are going to pay, then we would rather pay for the investment in a more modern business, that would benefit the environment for example."

UK Farming Minister Jim Fitzpatrick also told reporters today (13 October) that the government would not support anything that "takes us backwards to a regime of heavy market support for inefficient dairy producers at the expense of taxpayers and consumers".

EU Agriculture Commissioner Mariann Fischer Boel said the high level expert group would start work today and meet monthly to consider a range of matters, including stabilising the market and producers' incomes, reducing price volatility and enhancing market transparency.

Fischer Boel said milk prices were rising. The average milk price in July/August was 26 cents per litre, up from 25 cents in July and was expected to further increase by 1-2 cents for delivery in September/October.