Beware short-term offers, organic dairy men warned

By Robert Harris

ORGANIC dairy farmers should safeguard prices by resisting tempting offers from processors and large co-ops.

While lucrative premiums and cash handouts may look good in the short-term, they could fragment the sector and undermine prices, says Sally Bagenal, chief executive of the Organic Milk Suppliers Co-operative, based in Axbridge, Somerset.

Speaking exclusively to farmers weekly, Mrs Bagenal claimed that some processors, keen to sign on new direct suppliers to meet retailers demands, were offering farmers thousands of Pounds in return for exclusive rights to their milk.

“I know of one farmer who was offered about 8000 to sign up with a leading liquid milk processor.

Such incentives are very cruel at a time when farmers are strapped for cash,” she says, disappointed by the loss of at least one potential member in conversion.

She is also angry at larger co-ops seeking to tempt new members.

This week, Axis, the new Midlands-based producer group, announced a package worth 31.5ppl to organic farmers, 2p more than the OMSCo price.

However, the price is only guaranteed for six months, says Mrs Bagenal.

“If we are not careful, we could be back to the situation that the conventional sector found itself in at deregulation.

“It is in everyones interest to work together, and go with a group that has an established market upon which it can build.”

OMSCo, which already markets more than 80% of the UKs organic milk, is keen to expand, she admits.

The group has also changed its articles of association, allowing it to establish satellite groups, notably in Wales and Scotland.

However, others believe they should have a slice of the action.

Robert Wiseman Dairies admits it has talked to farmers about helping them through the often costly conversion period.

“But we are not talking wads of money,” says the companys Peter Nicholson.

“The organic milk market is a long-term one, and it is in everyones interest to offer long-term contracts. That is what we are doing.”

An Axis spokesman said its package responded to members requests for secure markets and a good price.

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“Axis has a supply base coming to it from Milk Marque, which includes organic milk.

“We clearly want to do our members a good deal. And, dont forget, we are a farmer group.”

The company is also offering an interest-free loan of 1200 for producers in conversion, he adds.

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