'Significant increases in farm gate milk prices now justified'

FARMING unions both north and south of the Border have called on milk companies to increase their farm gate prices following a surge in the price of milk on the supermarket shelves.

NFU Scotland's milk committee chairman, Jimmy Mitchell, pointed out that spot prices for liquid milk were soaring as were wholesale prices for cheese, butter, cream, and milk powders, while milk supplies remained very tight. "However, the impact of these positive signals at farm level has been limited to a few milk purchasers increasing their prices by a few fractions of a penny and once again the chain appears to be failing those at the sharp end producing the milk," he said.

Mitchell's counterpart in the English union, Mansell Raymond, said there was a "long overdue" need to return more cash to dairy farmers from the current favourable trading conditions.

Both farming leaders paid tribute to the milk buyers that have already made moves to increase their prices, their targets being those that have not so far moved on the issue.

Mitchell said: "Our view of the market is that significant increases in farm gate milk prices are wholly justified. We expect milk processors to agree and will confirm that those supplying them with milk can reasonably expect a strong uplift in their milk price in the coming months.

"If processors don't agree with us on where we think the market for milk and dairy products is, then we need to know why. If, at that stage, the finger is pointed at the retailers then the debate will move on to their doorstep.

"Experience in the past has been that transparency and fairness in the dairy supply chain has been hard to achieve and that too often, processors and retailers have let the producing side down. Here is a clear opportunity for them to show that supply chain relationships are moving forward to the benefit of all."

Scots MEP Struan Stevenson entered the debate by calling on supermarkets that are squeezing the dairy farmers who supply their milk to be "named and shamed".

"With the big retailers paying farmers a current average of just 24p per litre for milk – less than the 27p cost of production – more and more are facing financial ruin," he said.

Stevenson said he believed that one of the main reasons there were now only about 1,300 dairy farms left in Scotland compared with more than 2,000 herds back in 1999 was the unfair pressure in the milk supply market.

He referred to a new report, A Fair Deal for Farmers, which is currently making its way through the European Parliament, saying the report could help to level the playing field.

Among other proposals, it suggests publishing a list of abusive pricing practices to expose offenders. It also suggests every member state should appoint an ombudsman to arbitrate in disputes between suppliers and retailers.

"While more red tape is rarely the answer, we must find a way to expose and condemn this merciless squeezing of our dairy farmers," Stevenson said.

The European Parliament's agriculture committee will vote on the report's recommendations in June. If approved, it will then be voted on in the full plenary session of the European Parliament in July, when its suggestions could become law.