In the midst of a row over dairy prices in the UK, farming Minister Jim Paice has called emergency meetings between the UK’s agriculture ministers and representatives of milk processors and farming bodies. following a summit of UK farming ministers held yesterday, Mr Paice will meet with industry representatives today at the Royal Welsh Show.  

Over the past three months, dairy farmers have seen their farm-gate milk prices eroded by up to 4 pence per litre in two rounds of cuts by processors. Farmers claim they have yet to benefit from a recent increase in the profitability of milk and that the cuts have brought farm-gate milk prices several pence below the cost of production.

On Sunday, 2,000 farmers took part in blockades of processors in Shropshire, Somerset and Worcestershire, following similar actions in Yorkshire and Leicestershire last week. Protesting farmers are demanding processors rescind all cuts inflicted since April.

Jim Paice said ahead of his meeting with his Welsh and Scottish counterparts Alun Davies and Richard Lochhead that the UK industry “needs to address both the immediate issue of the price paid for milk and also the structures and mechanisms that will help underpin the long term viability of the sector.”

During last night’s meeting, the ministers agreed:

• A code of practice on milk contracts is in the interest of the whole industry at this stage; they urged the industry to reach a rapid agreement upon this, with effectiveness of the code to be subject to review within a year;
• Jim Paice will raise within UK Government the possibility of a role for the Grocery Code Adjudicator in providing a means of arbitration for any code in the dairy sector;
• Cooperatives and Producer Organisations are key to addressing the current imbalance in the market place in the longer term.

Speaking after the meeting, Scottish Rural Affairs Secretary Richard Lochhead said, “At tonight's meeting there was recognition from all three Ministers that there is an imbalance in the supply chain. It was clear that the preference of all three Ministers is for a robust code of practice which will deliver transparency in milk pricing and a fair price for our milk producers. But there was also acceptance that legislation remained an option if necessary.

“The success of the code will of course be whether we find ourselves back in same position in next few months and it is important the code delivers a long-term solution to this unfair and emotive issue - not a quick-fix.”

Industry meeting at Royal Welsh Show

Today’s meeting will bring together representatives of a coalition of farming unions and organisations formed in protest against the cuts as well as representatives from processor’s organisation Dairy UK. The meeting at the Royal Welsh Show in Builth Wells comes after a fourth night of protests for which the farming organisations have pledged their support. However, Defra has condemned the actions.

Nevertheless, it appears the protests are having an effect; a ‘name and shame’ campaign orchestrated by the NFU, which at first received hand-wringing responses from the supermarkets featured on widely circulated posters, has served to increase awareness of the current crisis and precipitated action from retailers. Following the first night of direct action by farmers last week, the Cooperative announced an increase in the premium it pays its farmer suppliers, bringing their total milk price to 29 pence per litre.

On Saturday, another supermarket featured in the poster campaign followed suit. Morrison’s announced it will increase the premium paid to dairy farmer suppliers to 6p-a-litre from 1st August.

Responding to the announcement, NFU president Peter Kendall said, “We’re really pleased to see Morrison’s response to the calls from a coalition of farming groups to reverse the announced price reductions and address the exceptional costs dairy farmers are now facing. We need a long-term solution that addresses the need for a sustainable raw milk supply into the future. It’s now critical that other retailers and major buyers of milk respond to the responsible steps Morrisons is taking.”   

Further protests are planned to take place today in Essex and Scotland.

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