17 August 2001

Co-ops processing Yes…

By Robert Harris

MILK Link members have backed their boards plans to restructure the co-op to enable it to move into processing.

About a quarter of the co-ops 3000 members voted, either in person or by proxy, at a special general meeting held last week, says the company, and over 95% supported the proposals.

More than 1500 members have already returned Financial Support Agreement forms, says Milk Link. This gives the co-op the right to retain up to 0.5p/litre from each member to invest in a capital account. The money is repayable with interest on retirement.

Members also agree to participate in a scheme, which guarantees up to 5p/litre a year against which bank loans can be raised.

The new structure, based on European models, will give members voting rights according to the volume of milk they produce, giving larger producers more say in the running of the company. Local groups will elect farmers to member councils, who, in turn, will elect farmer directors for the governing board, responsible for strategic management.

"By becoming a significant processor with a balance of products, we will be able to redirect the profit we add back to members through their milk price," said chief executive, Barry Nicholls. "Owning processing capacity will help insulate our members from general market forces that are highly likely to apply a downward pressure on prices."

Another farmer-owned business, United Milk, is also claiming recent success, saying that its ongoing recruitment drive has doubled the amount of milk committed to the group. The total now stands at 350m litres.

Supplies will come on stream between now and October. "The new milk supply reflects farmers growing confidence in United Milk as a quota-holding milk broker soon to be underpinned by the opening of the 800m litres a year butter/powder plant at Westbury," said chief executive, Don Morris.

The £45m plant is due to open in May, 2002, and the company has started recruiting the first of the 75 people it will employ. A further 15 drivers will be needed after the companys decision to invest £1.4m in 10 new tankers.

, more than doubling the size of its fleet.