NFU calls on Milk Marque to end the 90% rule

15 April 1998

NFU calls on Milk Marque to end the 90% rule

By FWi staff

THE National Farmers Union has called for the suspension of the 90% rule in Milk Marques next selling round in July, following the continual fall in farmgate prices.

The Monopolies and Mergers Commission is currently investigating Milk Marques selling system, and is due to hand down its findings in October.

But this is too long to wait for many producers “already gasping for breath”, according to NFU president Ben Gill. He is advocating that the 90% rule be scrapped in the interim until the MMC inquiry is complete.

The NFU argues that the 90% rule is a major obstacle for dairy farmers trying to get a fair price for their milk.

The so-called 90% rule was introduced in 1996 as part of a package of measures in response to concerns expressed by the Office of Fair Trading over the operation of Milk Marques selling system.

Under the rule, Milk Marque is required to open a further round of bidding if the farmer owned co-operative receives bids for less than 90% of its total milk available for sale (excluding forward contracts).

Milk Marque was forced to offer an unprecedented fourth selling round in the first quarter of this year after processors failed to take up its supplies. Milk prices are currently at 18-18.5p per standard litre. The last time prices were this low was in the early 1980s.

“The situation facing the milk sector is severe, with prices paid to producers plummeting by 25% over the last 18 months,” Mr Gill said.

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