6 September 2002

Study spells out why UK is bottom of milk table

CONSULTANTS assessing the UK milk industry have been left in no doubt why its farmers believe milk prices remain at the bottom of the EU league table.

NFU Scotland presented its case last week to consultant KPMG, the firm appointed in June by the Milk Development Council to analyse the UK dairy industry.

Robin Christie, chairman of the unions milk committee, said: "In the past four years producers have consistently suffered the lowest milk price in Europe by some 10-12%."

A number of reasons had contributed to that, he said, including deregulation, the governments interpretation of competition laws, weak selling systems, processor and retailer dominance, lack of producer-owned processing, and the value of the £.

"The list goes on, but all have contrived in recent years to pay farmers an unsustainable price for their milk and drive one in 10 Scottish producers from the industry," said Mr Christie.

The union said farmers desperately needed the KPMG study to outline the structural, economic and regulatory problems that had left farmers facing below-cost production, while supermarkets and processors seemed not to have suffered.

"All we want is for those who milk cows day in, day out, is a fair share of the milk price to allow them to support their businesses and their families," Mr Christie said.

"This is not happening at farm level, yet many others downstream appear to have little difficulty in satisfying the demands of their directors and shareholders."

KPMGs remit is to develop policy recommendations on the best way forward for the UK dairy industry. It will examine the structural, economic, regulatory and legal factors influencing the milk industry in the UK compared with other EU countries. &#42

Those who milk cows day in, day out, should have a fair share of the milk price, says NFUScotland.