First Milk floats plan to raise extra capital

6 September 2002

First Milk floats plan to raise extra capital

FIRST Milk has sent its 4000 members details of new plans to raise more capital to invest in processing.

Farmers will vote on the proposals at the annual general meeting on Sept 30.

The company plans to raise money through two routes. All members will pay a flat rate fee of £1500 into a membership account, probably over three years, from Apr 1 next year. This will be deducted from milk cheques and the "thirteenth payment".

The move could raise up to £6m, though members can convert preference shares.

Farmers will also contribute towards a capital account through an ongoing payment of up to 0.5p/litre, which could add a further £11m/year.

The actual amount will be flexible, said spokesman Jonathan Horrell. "For example, the board could go to the membership and ask for a specific amount for a specific project over a certain number of years."

But not all producers are happy. Maureen Proven, whose husband farms at Glaister Farm, Darvel, Ayrshire, says it is unfair that flat payment is to be levied on each farm and milk volume. Other small producers feel the same way, she adds.

Current herd production is 630-700 litres and, because the first 400 litres does not qualify for the firms 2.5p/litre volume bonus, the farm receives a lower average price than larger ones.

Production is also likely to fall below 200 litres/day in the winter, which will incur an extra 5p/litre charge on the shortfall to cover collection charges.

This has already caused a storm of protest in Scotland, where about 20 small producers are understood to be facing such a charge.

"First Milks brochure is full of talk about uniting and working together for our mutual interest," said Mrs Proven. "Meanwhile, they are targeting smaller producers. I dont want my husband to sign up unless First Milk makes allowances for smaller farmers."

However, Mr Horrell said: "We are absolutely not saying we are better off without small producers, but we cannot afford to subsidise and carry people." &#42

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