15 January 1999
Mixed reception for producer power
By Allan Wright
PLANS by two farmers from north Wales to give milk pricing power back to producers was greeted with both sympathy and scepticism at the Semex dairy conference in Glasgow this week.
Scottish NFU vice-president Peter Chapman spoke for many when he said: “I have great admiration for what these farmers are trying to do and we would support anything which gives farmers more power in the market. The trouble is that I just cant see it working.”
The aim of the Milk Marketing Body (MMB), established by Richard Tomlinson and John Newton-Jones, is to win farmers away from direct supply contracts with dairies, leaving the MMB to negotiate a higher price through its collective strength.
Mr Tomlinson explained that there would be a joining fee of £350, which would buy a single share in the company. There would also be a 2% sales commission on top of haulage and milk testing charges.
“We anticipate net prices 0.5 to 1.5ppl higher than would otherwise have been obtained in 1999. We expect to begin operations in the spring and have already received a commitment from some milk buyers,” he said.
Challenged on how he might secure a higher price, Mr Tomlinson said the strength of the company would be that it could walk away from talks if the price was not acceptable.
But asked six or seven times about the alternative market if he had to walk away from a deal, there was no satisfactory answer.
David Shaw of brokers Sorn Milk applauded what the Welshmen were trying to achieve. “But you have no chance. We have 13% more milk than the market requires and as long as that is the case you will not get the price increased,” he said.
There was unqualified support for the scheme from Yorks farmer Philip Green who has quota for 2.2m litres. “I believed in the so-called partnerships and joined a group supplying MD Foods. Now I am totally disillusioned. There has been no partnership.
“The idiotic dairy has allowed supermarkets to drive the price down. I pledge you my full support,” he said.