NFU hits out at milk price 'scandal'

Despite marginal price increases being announced by various milk processors in recent weeks, union leaders yesterday went on the attack over the continued low level of reward going to their dairy farmers.

National Farmers Union president Peter Kendall, speaking at the Great Yorkshire Show, said it was a disgrace that UK milk producers were "languishing at the bottom of the European milk price league table.

"It's just plain wrong that British dairy farmers are paid the lowest prices in Europe. They're receiving around 4p/litre below the European Union average, which is a disgrace."

UK producers wanted to expand their businesses, he claimed, but market signals told them to do the opposite.

"The dairy industry urgently needs fair terms and conditions of trade and that's why the NFU is backing calls for a voluntary 'code of practice'.

"As part of our campaign, we have been lobbying MPs and dairy processors to push for the introduction of fairer contracts. We believe these will deliver negotiating strength and price transparency to dairy farmers.

"One long-term reason for the current campaign was the expected rise in the population in the UK, which will mean some eight million more consumers within 15 years.

"That should be great news, but unless we can find a way for our dairy farmers to get a fair return on their investment, it's difficult to see how they'll be in a position to rise to the challenge."

Kendall looked forward to the government's food plan and its intention to produce more, but he was worried that, for dairy farmers, the really critical first step was having a sustainable level of income.

The union's dairy board chairman, Mansel Raymond, was equally forthright, describing the position the UK milk price now occupied in the EU league table as "nothing short of scandalous". He continued: "The clear fact for all to see is that equitable transmission of price and margin in the supply chain is not happening. Farmers are anxious to invest to expand as we head to the end of milk quotas. There is simply no excuse for procrastination or failure to pass on price rises to farmers.

"There has never been a clearer signal that things have to change. We have identified the weaknesses in most existing milk contracts - let's work together to put things right so we can look forward to a future of growth and profitability."

Speaking on behalf of the Scottish union, Kenny Campbell, milk committee convener, said that recent price increases still left producers well behind what they would be getting if there was an adoption of NFU Scotland's plan to link the milk price with a formula based on the price paid for cheese and processed milk.

In promoting this formula, he said the union was still speaking with processors and retailers, highlighting the benefits of a transparent pricing mechanism in the dairy sector. Sadly, he admitted this would not provide an overnight solution "as producers need more money now".