Dairy farmers warn of more protests

Free milk was delivered in Scotland's capital city today to highlight cuts in the price that dairy farmers receive for their milk.
Free milk was delivered in Scotland's capital city today to highlight cuts in the price that dairy farmers receive for their milk.
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FARMERS have not ruled out further protests in the campaign against the price they are paid for milk, one of the industry’s leaders said today.

David Handley, chairman of Farmers for Action (FFA), warned that producers could target other dairy processors after last night’s demonstrations.

Supporters of the FFA used tractors to block a Robert Wiseman Dairy processing plant near Bridgwater, Somerset, while other farmers gathered outside an Arla plant in Ashby-de-la-Zouch, Leicestershire, and at another plant in Leeds.

Dairy farmers are furious about cuts of up to 2p a litre in the amount they receive from major milk processors and many fear the shortfall will force them out of business.

The action is the latest in a series of protests by farmers who are angry that they are to be paid less for their milk than it costs to produce it.

Mr Handley, a dairy farmer from Monmouthshire, said there were meetings today with Robert Wiseman and Arla and said plans were being drawn up for further demonstrations.

“You have got to give these people the opportunity to respond,” he said.

“We will judge at the end of that whether there is a necessity to go back there again or whether we move on to the next target.

“I think that sort of decision will be made fairly soon. We have got a contingency plan to go out, certainly at one depot, tonight.

“That will hinge on what happens today and then we will make the plans for next week.”

The latest cuts will see farmers paid around 25p a litre for milk, but the NFU said the cost of production is 29p a litre, meaning a sale price of 29.5p is the minimum needed to remain viable.

Farming minister Jim Paice said he would be holding meetings next week with milk producers and supermarkets to draw up a voluntary code for contracts.

“They can’t operate a cartel but what they can do is sign up to a voluntary code of practice,” he told BBC Five Live.

“There’s nothing illegal about this. This would not set the price but would set the arrangements for the contract so that farmers and processors knew where they stood.”

Mr Paice criticised the supermarkets for their role, saying they were a “major player” in the market, which sees customers pay around 46p for a pint of milk.

“I think supermarkets have to account for why they are using milk as a loss leader,” he said.

“Yesterday two of our biggest supermarkets launched a marketing campaigning bringing four pints for a pound and in one case 98p.

“There will always be some that are less efficient than others and they need to catch up.

“When you have got a supermarket selling milk at 25p a pint there isn’t a farmer in Britain who could have that on the shelf at that price.”

Mr Handley criticised the minister for creating a “talking shop” and accused him of doing nothing to solve the crisis in the dairy industry.

“I have got no faith in the man whatsoever. Mr Paice is a farmer and he should be a farmer’s friend,” Mr Handley said.

“He has been involved in this scenario for the last two years. He has consistently been told what the problems are.

“We’ve had all this rhetoric from him: ‘I will bang heads together, I will do this, I will do that’.

“All he’s going to do is have a bloody talking shop again. He knows the problems and he’s known for a long time and he’s failed to do anything.

“He told us quite categorically when we met in London a week last Wednesday that he wasn’t prepared to do anything in respect of legislation but he would bang heads together.

“We’ve moved on a week and he still hasn’t banged any heads together. Don’t hold your breath on that one. He’s a politician and he’s going to say everything he thinks we want to hear.

“The sad part is that we find ourselves in 2012 having to protest about a situation that is not only going to inconvenience our end customer, the consumer, but is also putting a damn sight more inconvenience on the people producing the raw material.

“What you have got now is anger and frustration and it is down to the likes of me to try and control that in a way that is effective but doesn’t go over the top and cause a problem.

“It was clear to say last night in Somerset that there are a lot of angry people.”

Mr Handley said there were around 550 farmers and 120 tractors between the Bridgwater plant and a nearby Morrisons supermarket distribution centre.

The FFA said there were about 400 farmers outside the Arla plant in Ashby.

James Small, 36, a livestock farmer on the Mendip Hills in Somerset, supported his dairy colleagues at the protest near Bridgwater last night.

He said the cuts in milk prices equated to a drop in income of £50,000 to the average farmer.

“The Government is reluctant to step in and legislate, preferring to let the market work, but the problem is the market isn’t working,” he said.

“It is hugely distorted at the moment with vast power at the top and virtually none at the bottom.

“The farmers are feeling frustrated and they vented that last night. There are no plans at the moment for further protests but there are no plans not to have any further protests.

“I think that’s all I want to say regards plans for future protests.”

Dairy farmers fear the cuts to payments will force them out of business, pushing up the price of milk to consumers in the long-term.

“What’s really griping with this is that we are not expecting the customers to pay any more for milk,” said Mr Small, who is county chairman for the NFU in Somerset.

“Countless surveys have been done and they have come back saying overwhelmingly that customers would be prepared to pay a little bit extra for their milk if they knew that was going direct to the producer.

“At the moment the margins the retailer are getting from the cost of the milk has gone up while the amount that is going to the farmer has gone down.

“If a retailer wants to make milk a loss leader in their store then let them do it out of their margin.

“They are not taking a hit from their margin. They are very good at PR and saying what a very good job they are doing on behalf of consumers.

“But in the long term they are screwing up an entire supply chain industry in the country for what 93% of this country use.

“Dairy farmers have been saying for over 15 years now that if they keep doing this dairy farmers are not going to be here.”

Mr Small said that dairy farmers had been able to become more efficient but to do so have borrowed money against the value of their farm.

“They have basically been using that money to subsidise major retailers,” he said.

“So we are nearly at a stage now where they cannot borrow any more. Effectively they are taking out mortgages on their properties to help subsidise the low cost of milk.

“You can only do that for so long.”

But he did support what the Government was trying to do in creating a voluntary code in the sector.

“The contracts for dairy farmers are hugely distorted. There is no clear formulae for how the price is set,” he said.

“If a voluntary code could be brought forward it would be better.”

Some of the milk processors have blamed the collapse in the global price for cream for the cuts passed on to dairy farmers - but Mr Small rejected this, describing it as a “double standard”.

“When the value of cream rose the processors had the audacity to say that the milk market in the UK was not affected by the world price of cream,” he said.

“As soon as the value of cream dropped they dropped the price of milk because they said a large proportion of their income came from the commodity of cream.

“So which is it? It’s funny they can’t make their mind up but whichever it is, it works in their favour. It’s a double standard.”

Dairy farmer Anthony Rew, from Newton Abbot, Devon, said: “There was a price cut about a month or so ago of about a penny and a half on our milk and now three of the large buyers have announced a price cut starting from August 1, and that’s really stimulated the dairy industry into action.

“This summer has been terrible. Farmers have been producing below the cost of production, they’ve been paid below the cost of production for a while and now this will be three and a half pence to four pence below the cost of production that they are getting paid.

“It’s really put the industry in an unsustainable place.”

Dairy Crest is one of a number of milk producers to have slashed the price they pay farmers for milk after seeing the value of cream plummet this year.

It has admitted its milk price cuts “put pressure on our supplying farmers”.

A spokesman for Robert Wiseman Dairies said: “We fully understand the strength of feeling amongst dairy producers and continue to engage with those with an interest in the dairy supply chain.

“It is important to stress we are not in a position to fund a milk price at the level it was prior to the global collapse in the value of cream.

“It is our hope that the market for liquid milk and bulk cream which is at the core of this issue will quickly find a balance which will allow us to return improved prices to farmers.”

Celebrity chefs Jamie Oliver and Hugh Fearnley-Whittingstall have stepped into the debate and urged the public to boycott some supermarkets over cuts to the price of milk.

In a letter to The Times, Oliver and Fearnley-Whittingstall said it was “shocking” that many dairy farmers were to be paid less for their milk than it costs them to produce it, adding that the industry was becoming “unviable”.

Calling on consumers to boycott supermarkets that continued to use milk as a loss leader, they warned that thousands of family businesses would fail and the landscape would be threatened if the industry breaks down or becomes “super-industrialised”.

But the British Retail Consortium said supermarkets were the “wrong target”.

Spokesman Richard Dodd said: “They’re actually the best payers for milk. Currently, 11 of the top 12 best-paying milk contracts are contracts paid by supermarkets.”

Dairy farmer Dean Sparks said last night’s protests were about bringing the issue to the attention of the public rather than just to cause disruption.

Mr Sparks, who farms his herd of 250 at Vale Hollow Farm, near West Harptree, in Somerset, said the protesters were not trying to get more for their milk - just what has already been taken from them.

“The protest was about getting the money back that they’ve just taken off of us,” he said.

“They took 2p off of us last month, and now they’re going to take another 2p off us in August, which will be a grand total of 4p that we are going to lose.

“Farmers are really angry and absolutely fed-up with the industry. They have had enough really - we’ve just about had a skinfull, I suppose. It’s been a real hard summer for us.

“We are producing milk under the cost of production, which is absolutely ridiculous.”

Mr Sparks said he hoped last night’s protests were enough to get their message across without the need for further action.

“I hope we don’t see any more protests but I think at the present time farmers are just so fed-up with the current industry on a whole and how messed up the industry is,” he said.

“It always takes a really long time to get a price increase, but it doesn’t seem to take a long time to get a price decrease. That’s the industry we’re working in.”

Mr Sparks said he would like to see a voluntary code that could see a more level playing field for farmers and milk companies.

“The voluntary code would be quite a good idea, really,” he said.

“What we need is different contracts, as we’re on 12-month contracts.

“So a milk company comes in and we sign the contract, which means we have to sell our milk to them for 12 months, which is OK as it’s nice to have that bit of reliability.

“But on the other hand, if they drop the milk price, we can’t go anywhere else.

“We can’t just ring them up tomorrow and say we don’t want to sell our milk to you.

“If Mr Wiseman cuts the price of milk and I want to go to Mr Dairy Crest because he pays me more, I can’t.”