Thousands of dairy farmers and industry representatives descended on Westminster today for an emergency dairy summit organised by the NFU. Cuts to farm-gate milk prices over the past weeks have sparked panic over a ‘crisis’ in the diary sector and a number of farming organisations, including the National Farming Unions of England, Ireland and Wales, Farmers for Action and Tennant Farmers Association, met this afternoon to discuss the industry response to the latest round of price cuts.  

The main auditorium at Central Hall, Westminster which has a capacity of 2,200 people, was packed out for the emergency summit, which ran from just after 1pm to 3pm. NFU President Peter Kendall was absent from the summit; the president was due to speak, but his return flight to the UK from France was cancelled.

Attendees were addressed by NFU deputy president Meurig Raymond, Farming Minister Jim Paice and representatives from a number of other UK farming organisations. The speakers, and the vocal crowd present in the crowded hall, called for the immediate reversal of price cuts inflicted on farmers since April.

The cuts, which came in two rounds between late April and early this month, saw processers announce cuts of 2 pence per litre to farm-gate milk prices, then further cuts ranging from 1.65 to 2ppl effective from August. The cuts, which were initiated in April by Dairy Crest and reprised in June by Robert Wiseman Dairies, are set to cost some affected farmers over £50,000 per year.

Deputy President levels scathing criticism at government and industry

The summit’s first speaker, Meurig Raymond, praised the crowd for attending and showing strength and unity in the face of cuts by powerful players in the dairy supply chain before taking aim at government inaction and unsustainable business practices.

He roused the assembled agriculturalists, saying, “I know most of you had no choice but to come today, because if you didn’t get on that bus or catch that train then in  five, 10 or 20 years’ time you might just look back and say ‘I wonder if we could have made a difference if we’d stood up and said enough is enough?  This is the final straw.’”

He continued, “I have never before seen such an outpouring of anger from the farming industry, nor have I seen such a display of unity.”

The union leader went on to say that the presence of farming minister Jim Paice at the emergency meeting demonstrated the severity of the situation in which the entire dairy industry has found itself. He claimed farmers have been “pushed to the brink” and that price reductions “cut to the bone and beyond,” adding “These latest cuts are the feed bill, the wages, the house keeping. These cuts will take us into loss making territory.”

Mr Raymond outlined the events of 2010’s supermarket price wars, which saw huge cuts made to retail milk prices, as supermarkets competed to entice recession-strapped customers. The process had a devastating effect on returns for UK farmers, who bore the brunt of the price war and the NFU believes its effects are still being felt; Raymond declared, “those deals done in 2010 are coming back to bite us hard.”

Union demands reversal of cuts

The deputy president backed by leaders from other unions and farming organisations represented at the summit, took the opportunity of the gathering to make a series of demands on government, processors, retailers and consumers.

Whilst some supermarkets give a guaranteed price to their producers, through dedicated supply agreements which factor production cost into price or pay suppliers a premium, Mr Raymond named Asda, Morrisons and the Cooperative as supermarkets which do not support farmers in this way.

Asda and Morrisons have already drawn unfavourable attention for this; the Asda stand at the Great Yorkshire show was picketed by frustrated farmers on Tuesday. However, Mr Raymond suggested that ensuring a sustainable price “is not just the responsibility of a handful of large retailers.” He challenged all retailers and processors to secure a sustainable price for dairy farmers and build long-term relationships.

In the immediate term, he called for the reversal of all planned price cuts, along with those which came into effect in May and June. Farmers’ groups have called for price cuts to be reversed by 1st august, otherwise some have threatened direct action, including withholding milk and targeting supermarkets with blockades.

The NFU deputy president’s calls were backed by Farmers For Action spokesperson David Handley, who proclaimed,  “If someone doesn’t do something in 20 days, including the buy one get one free government we’ve got, we will have no other option but to show them what we are capable of. And this time we are all behind you.” Handley’s pledge for direct action received a standing ovation.

Other demands included moves towards establishing fairer contracts, including opt out clauses to provide “minimum protection” and the creation of a supply chain code of practice as a mater of urgency. Mr Raymond concluded, “The talking has got to stop and the action start. I do not accept that the government cannot act in this area, there are a number of cases where parliament has acted to guarantee fair contracts, regulations and terms.”

Representatives of other national NFUs from around Britain expressed support and solidarity with Mr Raymond and the assembled farmers. NFU Scotland president Nigel Miller echoed Raymond’s calls for intervention, saying, “We’ve got to get rid of the tyranny of discretionary pricing. We believe, just as the English union does that regulation may have a place in that.”

Stephen James, deputy President of NFU Cymru, expounded on the impacts being felt across the farming community as a result of the crisis in the dairy sector. He said, “This will impact on all in farming, there are vets in here, there are beef farmers, sheep farmers.”

James also stressed, “If this price cut goes ahead, it will affect us, in an area where we can produce milk and we can do it off grass. It will result in the loss of £18 million in our part of wales; a major part of our community.”

Farming minister speaks his Paice

Responding to the calls made by irate farmers and representatives, Farming Minister Jim Paice suggested the plaintiffs look to the market for salvation. Paice took to the stand with a bottle of milk, stating “I know how much this costs now,” but not before Farmers for Action’s David Handley had quipped, “I would suggest to the minister that if he went out with his wife and did a bit more shopping, he would see how farmers are getting screwed every day of the week.”

Although he did not answer any of the speakers’ pleas or threats directly, Mr Paice did suggest that UK processors look to fill markets which have been dominated by competitors from elsewhere in the EU as well as a number of third countries. Regurgitating the rhetoric of the government’s current export drive, which has found critics amongst sustainability campaigners and food policy experts, Paice said, “processors fight for the right to bottle for the supermarkets, but the liquid market is static;” he instead urged them to “chase demand I have talked about and not battle over bottling.”

After calling for more attention to be paid to processed goods and exports, Paice declared that “government ministers can’t fix prices and I don’t believe we should.” He expressed support for a voluntary code over regulation and assured the UK government has no greater power to set price than is already offered in the EU regulations.

The minister received a frosty response from the panel and howls of execration from the floor when he demanded of the assembled farmers, “Are you sure you have done everything to reduce your costs?” to which Meurig Raymond responded “There is no fat left on the bone.”

The minister went on to talk about bovine TB eradication and the groceries adjudicator. He announced that the government had decided to renege on contentious commitments made on slurry stores over 20 years old and on Nitrate Vulnerable Zones, but did not offer the support the assembled farmers were seeking, assuring them the days of government intervention are gone.

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