Asda to pay more for milk after farm protests

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Supermarket giant Asda has become the latest retailer to bow to pressure and increase the price it pays farmers for milk as protests continued, with those behind them vowing to continue until they receive a fair deal.

The Leeds-based supermarket chain last night announced it was to increase the price it pays farmers on its DairyLink scheme to 29.5p per litre.

Farming campaigners said, however, they would continue staging blockages and demonstrations until all retailers and processors agreed to pay what they say is a reasonable rate for the milk they buy.

Last night around 500 farmers allied to the Farmers for Action organisation staged a blockade of the site of the Arla dairy plant in Leeds, the second time it has been targeted in the past week.

It was also rumoured yesterday that other disgruntled producers supplying Asda were preparing to mount a massive campaign against its stores nationwide, although it was unclear whether this would go ahead given the price increase announcement.

The decision by Asda’s bosses to improve its rate comes after Morrisons and the Co-op both announced price rises over the weekend and follows a 2p per litre rise it revealed last week, which was heavily criticised at the time by farming leaders as still well short of the cost of production.

The fresh increase however was welcomed last night and will now increase pressure on milk processing firms such as Arla, Dairy Crest and Wiseman.

Stephen Frankland, a farmer from near Harrogate and among those participating last night at Arla’s plant in the Stourton area, said: “We want the price cut planned for August 1 to be reversed. Then we are happy to talk. We need a price that is at least equal to the cost of production.”

Peter Kendall, National Farmers’ Union president, called upon Arla, along with Wiseman/Muller and Dairy Crest to commit to rescinding price cuts.

An Asda spokeswoman said: “We understand the increasing cost pressures facing dairy farmers. That is why we were the first retailer to invest in increasing our premium to 3ppl last week to offset the cuts previously announced by Arla.

“We have continued to listen to our farmers and their growing concerns about the forecast cost of winter feeding. With that in mind, Asda will be increasing the premium paid to our DairyLink farmers by a further 2 pence per litre from August until the end of the year.

“The premium paid by Asda will be 5ppl above the Arla base price and mean Dairylink farmers are paid 29.5ppl. As well as taking direct action to support our farmers, we will continue to discuss the wider milk procurement model as part of our commitment to improving the sustainability of the British dairy supply chain, whilst at the same time continuing to help hard pressed families make ends meet.”

The dairy crisis has seen the Government’s Farming Minister Jim Paice convene showdown talks with all parties, and he is set to meet with representatives from Asda, Morrisons and the Co-op today, amid hopes a voluntary agreement, reached at this week’s Royal Welsh Show, will strengthen farmers’ hands and make the dairy industry more sustainable.

Mr Paice said: “We’ve now brokered an agreement which, once finalised, will make contracts between farmers and milk processors fairer and more transparent. But we need real changes across the industry because as things stand dairy farmers are going to seriously struggle in the future.

“That’s why I’m going to be sitting down with retailers and manufacturers to emphasise just how crucial it is to take a more long-term approach. The conversation will focus on issues such as the effects of their extremely competitive deals on the rest of the supply chain, and what could be done better to source and support British produce.”