Putting a value on personal labour

Dairy farmers are in charge of complex operations that require a wide range of skills to make a success of the business.

But unlike the managing directors of comparable companies, we are more likely to be found on the shopfloor than in the boardroom.

Individual farmers are not large enough to move the market, so inputs and outputs are effectively fixed.

We are currently stuck between a rock and a hard place, subsidising poorly run businesses on either side of us in the supply chain.

We need to value ourselves as dairy producers and unless we place a value on our time, how can we expect our customers to do so?

In its recent Farm Business accounts Promar stated that: “The bold reality is that the continuation of low milk prices has led to the unacceptable situation where dairy farmers’ incomes have only exceeded the national minimum wage twice in the last seven years.

Through this period the effective rate of pay averaged 2.90 per hour.”

The Royal Association of British Dairy Farmers sees poor returns as a major concern.

Its recent study, looking at the costs of farmers own labour, came up with some startling conclusions.

The most notable being that even on a 100-cow or less unit, just over three people are involved, and that farmers and spouses took just 10.5 days holiday a year.

They also looked at what farmers and their families would be worth in comparable jobs and found the average cost of family labour was 42,241 – equivalent to 3.81p/litre, or 271 a cow.

Recent press reports have indicated dairy profits are up by 16% to 29,000.

But take out a figure for drawings at an average 42,000 and the picture doesn’t look as rosy.

Of course there are benefits in being a farmer as opposed to taking a salary.

A house is provided, we fall out of bed into the milking parlour, with no commuting, and we are our own boss.

This doesn’t however help pay the bills.

We need to set a price for the product we sell, be it milk, calves or cull beef, so when we go out into the marketplace we do what every other business already does.

What about farmers benchmarking themselves against businesses outside of agriculture?

How many of us are members of the Federation of Small Businesses?

How often do we meet other entrepreneurs and compare notes with them, as life is as difficult for the corner shop or landscape gardener, neither of whom have a regular, guaranteed milk cheque.

Less production may help.

But with a UK population touching 60m and milk products seen as an essential part of a healthy diet, we as 0.0003% of the population should not need to go down this route.

That said we live in a global village with products such as cheese readily transportable around the world, so it may be essential for production to drop.

There is no easy answer.

A milk regulator could help.

Yet this requires primary legislation and the political will and parliamentary time are not available.

So the solution has to come from within the industry itself.

We need to take responsibility for our own future because no one else will.


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