Erikka Askeland: Farmers in no mood for bottling out

By ERIKKA ASKELAND
Published on 21/07/2012 00:00

THE dairy farmers are revolting. Sure, it’s an old joke, but this week the farmers who supply the nation’s pintas have been forming blockades in Ashby de la Zouch, Somerset and York to shout about how they are being screwed by the milk processors and the supermarkets.

In Scotland yesterday morning, the angry farmers were being more polite. Instead of getting on their tractors to draw attention to their plight, they had a “dairy godmother” – otherwise known as East Lothian dairy farmer Simon McCreery – delivering free pints of milk to the lucky residents of the Shandon colonies in Edinburgh.

Whether through friendly publicity stunts or more aggressive tactics, the farmers are manning the barricades because the big milk processors have announced cuts to the amount they will pay for milk. The farmers claim that the price they will get come the first of August, when the cuts take hold, is less than the cost of production, which means they face a grim winter where it is likely many will just shut the dairy and give up the industry.

Should we care? If you like cows, as I do – at least from afar – it seems absurd that the milk they produce is sold cheaper than water. But then there is also something horrible about the industrial methods that turn the gentle, big-eyed bovines into 24/7 milk machines.

Most people don’t think deeply about how the white stuff gets into convenient cartons at their local shop. On a summer nanny job I once had, my young charge refused to drink any more milk after I told him it came from cows. He insisted he wanted “normal” milk instead. He was a very stupid child. It wasn’t a fun summer.

But the plight facing dairy farmers is getting desperate. Already the number of people milking cows in Scotland has fallen by more than half in the last ten years, albeit the Scottish herd has remained the same size.

But when market prices go awry, as has been common in these weird recessionary times, all hell breaks loose and recriminations start to stink up the air like farm machinery diesel fumes.

The supermarkets claim they have deals in place direct with farmers that gives them a fair price, but farmers claim these are often only aimed at a small group and that some are better than others. Marks & Spencer, Waitrose and Sainsbury’s all have such 
deals in place, while Asda, 
Co-op, Farmfoods, Aldi and Lidl, who lean on the processors for lower prices, don’t. Tesco buys some direct, but the rest comes from the cut-price milk “pool”. Meanwhile, the processors shrug and say no-one will buy the cream they take from the milk, so they have to reduce the amount they pay farmers.

A complicated tale, but essentially the problem in the UK is that we are just too efficient in getting milk to the consumer. The farmers sell milk to the handful of processors, who sell it to the supermarkets, often for super-low prices that haven’t changed for seven years.

Farmers in Europe get better prices for milk, but their herds are smaller, there are more processors, several of which are farmer-owned co-operatives, and more places and ways to sell it. Europeans, too, aren’t as keen on fresh milk as we are. The Continentals prefer to make cheeses and yogurt, which last longer.

The situation facing the UK milk industry is a bit like that other old joke about two cows that parody examples used in introductory-level economics courses.

For example, it can explain “isms” or systems – for example, capitalism: you have two cows. You sell one and buy a bull. Your herd multiplies, and the economy grows. You sell them and retire on the income.

Or bureaucracy: you have two cows. The government takes both, shoots one, milks the other and pours the milk down the drain.

Or even banking: you have two cows. You leverage the cows by putting them in special- purpose vehicles and sell the milk produced in tranches to bond holders. You have 1,000 cows on your balance sheet. Or my favourite, Wales: you have two sheep.

But the humour wears a little thin with our two cows, which are producing quantities of milk to their biological limits, but no-one can be bothered to pay for it.