Joining forces over milk price row

Cabinet secretary for rural affairs Richard Lochhead and NFU Scotland chief executive James Withers have both welcomed moves by the European Commission to strengthen the hand of producers in negotiating ex-farm milk prices.

Producers throughout Europe are up in arms over low prices and Scottish dairy farmers staged protests at supermarkets in Glasgow and Edinburgh before Christmas when 1,000 pints of milk were given away to shoppers.

Lochhead has written to EU farm commissioner Dacian Ciolos supporting a commission proposal for written contracts between milk producers and processors and collective bargaining by producer organisations to balance the bargaining power of producers in negotiations with buyers.

It is hoped the proposed new measures will come into force in 2012, after adoption by the European and will run until 2020, with a review in 2014 and 2018.

"In Scotland there is an imbalance in the supply chain which acts against the long-term interests of producers and it has to be addressed," said Lochhead. "Dairy farmers are continuing to find it difficult to secure a reasonable return on their milk. Input costs are rising and it appears that retailers are using milk as a bargaining tool in their battle for market share. This situation cannot be unchecked."

One in three dairy farmers in Scotland has quit milk production over the past ten years and dairy cow numbers have fallen by 35 per cent from 282,000 in 1980 to 185,000 today. The retail price of milk has increased by 24.5p/litre since 2000 but the ex-farm price is up only 6p/litre. Dairy farmers say they are currently losing 3p on every litre of milk while they claim retailers are making 18p/litre profit.

"As well as delivering more robust contracts between dairy farmers and milk buyers, the EU proposals suggest amendments to competition rules to strengthen the hand of producers in negotiations," said Withers.

• There was a wrong figure in the report of the dispute between land agents CKD Galbraith and the Scottish Tenant Farmers Association in The Scotsman on Friday. The rent offered by the tenant for Moonzie Farm was 10,266.74, not 21,266.74 as stated.