When dairy farmers leave their cows and take to the streets of London, something is very wrong at the heart of British agriculture.
In this case, it is the price of milk. Currently that is between 46p and 49p to the consumer.
The Agriculture Minister for England and Wales, Jim Paice, has been ridiculed for not knowing this. His ignorance illustrates the point, however, that the retail price of milk is not a major consideration in most people's budgets. Nevertheless, the retailers have continually forced down prices, resulting in an increase in the retail price of less than 20p over the last 20 years. The inevitable result is that farmers, despite valiant efforts to diversify into other crops and tourism, are going out of business. Over 8000 dairy farmers have left the industry across Britain in the last eight years and many now see the latest cut as the last straw.
The Prime Minister has said he wants to see a fairer deal between farmers and supermarkets and sought yesterday to prove his commitment by adding £5 million to the rural economy grant scheme to help dairy farmers in England and Wales become more competitive. This will come from the budget already allocated to rural issues, so there will be no additional money for Scotland through the Barnett formula. Even if the Scottish Government decided to do something similar, it is very difficult to see that an equivalent funding of £500,000 could have real impact. It may be that some farms could be more efficient but that is likely to require considerable capital investment if they are to reduce costs. In any case, there is very little scope for doing so on family farms with no outside labour.
The problem is the farm gate price for milk. It can never be sustainable to pay less than the cost of production, yet that is what some farmers are faced with under take-it-or-leave-it contracts from milk processors. They are now facing a reduction in the price they are paid at the same time as costs are rising as a result of the exceptionally wet summer which has forced some farmers to take cattle back indoors with added feed costs.
Scotland's Rural Affairs Secretary, Richard Lochhead, recognises that the whole supply chain depends on the farmers. He has told his Westminster counterpart that he is willing to consider separate Scottish legislation if necessary. That would bring its own problems to what is currently a UK market but a mechanism must be found that will ensure a fair price at the farm gate.
Mr Paice continues to advocate a voluntary code of conduct but experience has shown that some supermarket chains and, to a greater extent, the milk processing companies, flout this by using their power to force prices down. This race to the bottom is now threatening the viability of the UK dairy industry.
When Mr Lochhead meets representatives of the National Farmers Union Scotland today, he must seize the opportunity to begin a constructive way forward. In the meantime, consumers who believe that farmers deserve to be paid a price that reflects the physical effort as well as the financial cost of feeding, looking after and milking a dairy herd, can demonstrate their holding to principle by careful shopping.
If some supermarkets, including Marks & Spencer, Sainsbury's and Tesco, can pay a fair farm gate price, why can't the rest?
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