Scotland's dairy producers have received yet another blow following an announcement by Graham's the Family Dairy that it is to halve the price it pays suppliers for some of its milk to 7p per litre (ppl).

The company runs an "AB" pricing system where farmers are paid the full liquid price for about 90 per cent of their milk in the "A" pool, and anything supplied over and above that amount is paid a "B" pool price, on what Graham's calls "surplus" litres of milk.

Graham's announced that the "A" price, which producers will receive on the bulk of their milk is to be cut by 1.5ppl, reducing it to 23.75ppl. However, milk in the "B" pool will be cut by 7p, effectively halving it to 7ppl, the lowest price paid in the UK.

It is thought that the majority of the 100 Scottish producers who currently supply Graham's, the majority will be affected by the cuts.

NFU Scotland's milk committee chairman Graeme Kilpatrick said: "For such a major change a meeting with the producers should have been called to discuss the situation before any announcement was made."