Milk deals fail to avert threat of action

Concessions offered to dairy producers over low milk prices are not enough to prevent processors and retailers from facing direct action by farmers.

The warning came after Dairy Crest said it would allow farmers to walk away from contracts with three-months’ notice following a milk price reduction.

Currently, farmers supplying milk processors typically have to give 12-months’ notice before they can leave a contract in the wake of a price change they disagree with.

Meanwhile, Asda announced a 2p a litre increase in the premium paid to farmers who supply the supermarket with milk from 1 August.

Asda said the increase meant its farmers would continue to be paid 27.5p for milk. This would offset a cut previously announced by milk processing company Arla, it claimed.

Both companies unveiled the concessions hours before they were due to be quizzed by a committee of MPs over problems in the dairy sector at 2.30pm on Tuesday (17 July).

The Dairy Crest concession is seen as the more significant of the two because it increases pressure on other processors to follow suit.

The Asda deal, meanwhile, affects only 272 farmers who supply the retailer direct through the supermarket chain’s Dairylink initiative.

But farm leaders said neither concession went far enough.

Up to 4p a litre has been wiped off farmgate milk prices following a series of cuts by Britain’s major processors. Other milk buyers have followed suit.

A coalition of five farmers’ groups has pledged to take action unless dairy processors reverse the cuts in full by 1 August.

The coalition groups include the NFU, NFU Cymru Wales, NFU Scotland, the Tenant Farmers Association and Farmers For Action.

Farmers For Action said it was continuing to finalise plans that would see direct action taken over milk prices in at least two areas within the UK.

“At last, noises appear to be coming from milk processors with regard to our demands, but until we have a deal on the table, which is money back and no more cuts, pressure and action will continue commencing this week,” it said.

Speaking to Farmers Weekly, NFU chief dairy adviser Rob Newbery said Dairy Crest had taken a positive step but it was not the “big ticket” farmers were looking for.

“The big ticket item for farmers is a full reversal of the price cuts,” he said.

“To get recognition from farmers that Dairy Crest is taking farmgate prices seriously, it needs to reverse the price cuts.”

The NFU has pledged to back any plans to demonstrate peacefully outside processors and retailers involved in the latest round of cuts.

More information

Read more on our dedicated milk price cuts crisis page

Have you say on our forums