In a stark contrast to decisions being taken by other major buyers this week, supermarket Sainsbury’s has announced it will increase the price paid to its farmer suppliers from next month.

From 1st July Sainsbury’s will pay producers .26 pence per litre more for their milk. This reflects an estimated .3ppl rise in the cost of milk production over the last quarter. The supermarket is one of a small number of buyers which runs a Cost of Production (COP) model, deemed to be more sustainable by farming groups and policy experts.

The news that Sainsbury’s suppliers will begin to receive 30.56ppl comes as processing giant Robert Wiseman Dairies announced a cut of 1.7ppl, bringing the total amount of cuts inflicted on its suppliers to 3.7ppl in the last quarter alone, well in excess of 10 per cent of the milk’s former price.

The Wiseman announcement has sparked further calls for the introduction of a code of practice into the dairy supply chain to protect dairy farmers, most of whom are currently producing milk to a loss.

Feed, fertiliser and fuel costs have all risen sharply in recent months, with only fertiliser showing signs of abating. The rises, and current unequal relationships within the dairy supply chain, have caused concern in Britain and throughout Europe. The European Parliament commissioned a report into the effects rising input costs are having on farmers in January.

Alice Swift, a spokesperson for Sainsbury’s said, “While input costs continue to be so volatile for farmers, we’re pleased to show that the model is delivering a fair price for everyone whilst most importantly being sustainable for the whole supply chain.”

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