THE head of the UK’s largest dairy firm has defended paying a former Conservative minister £1,800 a day to sit on the board while the UK dairy industry is facing an “existential threat”.
Mike Gallacher, chief executive of Paisley-based First Milk, said former agriculture minister Jim Paice’s £90,000 salary for 50 days a year was democratically agreed by the co-operative and externally validated.
Salaries for the rest of the board are shrouded by commercial confidentiality but Mr Paice had to declare his in his register of financial interests until he stood down as an MP in March.
Holyrood’s rural affairs committee had some harsh words for Mr Gallacher and his Scottish director Jim Baird yesterday over the amount of money the distributor is taking from its suppliers while farmers’ profits are being squeezed by plummeting milk prices.
The committee was left wondering “whether First Milk is going to be a going concern in the next two to three years”.
One farmer saw his First Milk fees rise almost tenfold as he took in half as much profit while another is losing £200 a day, according to former SNP minister Mike Russell. He asked if £90,000 for 50 days work was “fair remuneration given the difficulties of the company”. Mr Gallacher said: “I don’t know what you expect me to say? The co-op is a democratic organisation. That salary is agreed democratically within the structure of the organisation and it’s externally validated, so I don’t know what else we can say.”
Mr Russell read out “horrific” figures from one farmer who paid First Milk retention fees of £145 last year from a profit of £15,000 for 46,000 litres of milk, but the following year paid nearly £1,200 from a profit of £7,000 for a similar yield.
He said: “How do people survive in those circumstances? I have another constituent that is losing £200 a day, and that is not sustainable.”
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