16 August 2002

Public would pay more if farmers get benefit

By Andrew Shirley

AN NFU survey suggesting consumers would be prepared to pay more for their milk has received a mixed response from two of the UKs leading retailers.

According to the poll, 80% of 1000 shoppers questioned would pay up to 5p extra for a pint of milk provided the money went directly to farmers. And 60% of city dwellers were unaware that most farmers are paid less for milk than it costs to produce.

The NFU is using the survey results as part of a campaign to urge processors to increase ex-farm prices. The union wants to see at least the EUs UK target price of just over 20p/litre at the next round of price negotiations in October.

Deputy NFU president, Tim Bennett, said: "These findings show that while retail price wars desensitise many shoppers to the costs of food production, they do care and they do not want to see farmers ripped off. Even at the price consumers are paying today there is enough money in the chain to pay producers 20p/litre."

Most processors and retailers contacted about the proposal accepted farm-gate prices need to be improved. But nobody was prepared to take the first step.

A Tesco spokesman said he doubted the survey represented British consumers. "To an awful lot of people, the price of everyday products is very important.

"I am not sure putting up the retail price is the answer. We are doing all we can to support dairy farmers, but we need to understand the whole supply chain and make sure everybody buys into the concept of transparency."

But Kevin Hawkins, communications director at Safeway, said. "The result exactly mirrors research I commissioned from our customers."

He believed more co-operation by retailers to increase prices was needed, within the rules of the Office of Fair Trading. "It is no good just one of us doing it, but somebody has to take a lead."

A spokesman for processor Robert Wiseman Dairies called the survey results "interesting", but said: "Commodity markets dictate the price of milk. We compete in the market for the right to supply the product."

Terrig Morgan, NFU milk chairman, disputed the role of commodity prices in setting UK farm-gate milk prices. "Of all the countries in the EU we have the lowest milk price. Farmers in Italy are getting about 22p/litre. Market forces are the same wherever you are. Is the supply chain really delivering to us the monies available?"

Independent dairy consultant Mike Bessey backed those comments. "The intervention system should give farmers in the EU a minimum milk price currently around 17p/litre. Dairy companies on the Continent normally pay more than the intervention equivalent because of their mix of branded and commodity products. The same thing could apply in the UK." &#42