Fury grows over milk prices paid to farmers

Later this week, cabinet secretary Richard Lochhead will host a meeting in Edinburgh with the various sectors in the milk supply chain in an attempt to sort out problems arising from low farm-gate milk prices.

While the invite has gone out to all parts of the milk industry, it seems that, while there will be representation from farmers and processors, only one of the major retailers has, so far, accepted the invitation.

This absence of the supermarkets at the meeting will further aggravate the tension that currently exists in the milk supply chain, with the big retailers posting big profits at the same time as milk producers are leaving the industry.

A spokesman for NFU Scotland said that it was essential that the retailers engaged in talks to try and sort out the problems. Current retailing policy is just driving money out of the milk sector, he stated.

Such is the anger at the profits being made by the major supermarkets that milk producers are planning to hold demonstrations next month to highlight the inequalities.

These demonstrations are already occurring in England and yesterday in London an alliance between the NFU of England and Wales and the Women's Institute was launched as part of a wider campaign to ensure a long-term future for the dairy industry.

Mission Milk, which follows a similar campaign three years ago, will utilise the 200,000 strong membership of the WI to carry the message of the dairy farmer throughout the country.

Speaking at the London meeting, WI chair Ruth Bond said supporting British dairy farmers had never been more important.

"More and more dairy farmers are leaving the industry, which has caused a long-term decline in milk production and low levels of investment on farms," she said. "There is a growing demand for British produce; local, quality, assured and traceable food, products that consumers can trust and support."

NFU president Peter Kendall highlighted the great deal of progress that has been made by retailers to establish dedicated relationships with the dairy farmers who supply them with liquid milk.

However, he added: "There is a growing and worrying split in the price being paid to those farmers fortunate enough to obtain a retail contract and those who cannot."

And he pointed out that it was not just liquid milk that was under-valued: "It's vital that both retailers and processors also demonstrate a commitment to farmers that produce cheese.

"Retailers have seen significant increases in the gross margins they make on cheese with very little being paid back to the farmers.This must change, or we face a situation where dairy farmers are unable to produce quality assured, high-welfare British food."

Last week the English NFU published responses from the major multiples to specific questions on milk supply contracts which highlighted the battle between retailers and processors.

Kendall said processors and retailers denied there was such a war - but branded products are available in the supermarkets at buy one get two free.

"It's a sign that the balance within this supply chain is all wrong."