Dairy farmers must control processing

By Shelley Wright

UNLESS dairy farmers take full control of both milk selling and processing by 2008 – when quotas are likely to disappear – they will have no future, dairy farmers have been told.

Speaking to about 200 dairy farmers in Scotland last week, John Loftus, architect of the recently formed UK Federation of Milk Producers, outlined how the embryo organisation could rescue the industry from its deepening crisis.

He has addressed more than 3000 dairy farmers since the plan to launch the FMP was revealed six weeks ago.

Support for the initiative in Castle Douglas, Dumfries and Galloway, was, as elsewhere, overwhelming.

All but one of the farmers agreed that all producers should contribute 1 a cow to raise 2 million to get the organisation started.

The plan, said Mr Loftus, was to establish the federation as an umbrella for four or five vertically integrated co-operatives, and return price-bargaining power to farmers.

“There has to be a blueprint to take the industry forward to 2008.

“You have to own the milk seller and the processor by that time or you will have no future.

“You have to own the space on the supermarket shelf where your money is going,” said Mr Loftus.

His prime target was to attract those farmers selling milk direct to processors back to co-operative marketing.

In total, 85% of all dairy farmers would have to back the scheme for it to succeed.

“That is the critical mass required to secure real bargaining power,” he said, affirming that the plan was to have everyone signed up by the International Dairy Farming Event at Stoneleigh in September.

quota link
Bruton Knowles

A meeting next month will establish the federation on a national and regional basis.

He has won 50,000 funding from the Milk Development Council to prepare a federation blueprint.

“However, I think it will take ten times that amount because there has to be a proper plan with a proper legal basis.

“This has to be a sound business venture, not another talking shop.”

“If we take just 0.5p of the 3ppl we could recover by being powerful sellers, it would yield about 70m a year which would fund a loan of 1bn – which could buy out the top dairy companies.”

See more