Angry farmers declare war on supermarkets

Thursday 12 July 2012

ANGRY farmers' leaders have declared war on supermarkets they claim do not pay a fair price for milk by threatening a consumer boycott campaign.

Farmers attend the National Farmers' Union Dairy Summit in Westminster. Picture: PA

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Kate Devlin and Brian Donnelly

Shoppers could be urged to stop buying their milk from retailers that dairy farmers claim do not pay them a fair rate for the product. Stores including Asda, Morrisons and the Co-op have been criticised over their policies.

Farmers' leaders say the trio do not have pricing mechanisms that adequately reflect the cost of milk production, with cuts of 2p per litre due next month, placing more pressure on the industry. Sources within the National Farmers' Union (NFU) admitted the sanction could be announced today, the day after more than 2000 farmers, including 40 from Scotland, took part in a protest at Westminster. They claim the latest price cuts to a pint are pushing many of them out of business as they are being squeezed by the difference between their productions costs and the price paid for the product by some retailers. One NFU source told The Herald: "It [a boycott] is something that is being looked at, to increase pressure on retailers who do not cover the cost of production." Scottish ministers yesterday warned they could legislate to ensure stricter controls on what farmers were paid if the dispute was not settled fairly. The NFU insists customers do not have to pay more for their milk, but that farmers deserve a fair share of that money. Prime Minister David Cameron also called for a "fairer deal" for farmers, while Downing Street said ministers were attempting to "bang heads" together over the row. Mr Cameron also announced £5 million of aid for farmers in England and Wales, to help them band together to negotiate collectively a better price for their milk. The Department for Environment, Food and Rural Affairs said the funds would come from its budget for England and Wales and it would be the responsibility of the Scottish Government to fund a similar scheme north of the Border. The dispute follows price cuts announced by three leading processors – Arla Foods UK, Robert Wiseman Dairies and Dairy Crest. The looming price cuts follow similar reductions earlier this year. Over-production of milk has meant the prospect of trader prices sinking as low as 25p a litre by August, but it costs farmers 30p a litre to produce. Unions have called for farmers to be paid at least the production cost of milk and introduce contracts to ensure dairy farmers are not exploited. Richard Lochhead, the Scottish Rural Affairs Secretary, indicated he would introduce legislation if farmers were given a raw deal. The change could involve measures to stipulate the content of contracts between milk producers and processers, including a pricing formula. A Scottish Government spokesman said such a move "could help to level the playing field". He added that ministers backed using a voluntary code of conduct in the first instance, as this could be achieved more swiftly than legislation. Protester Willie Campbell, from Ayrshire, said: "There are some major retailers who are paying a fair price, and they should be supported for that." He said he thought the dispute could end in a strike. "I think it might come to that. That does not mean that I think it should, but it might," he added. David Shaw, who runs Sorn Milk in Ayrshire, warned that dairy farmers were facing a desperate future if the cuts were introduced. He said he knew of one who was losing £30,000 a year, adding: "Many farmers don't know if they will even have a business at the end of this year." Doris Robertson, a dairy farmer in East Kilbride, South Lanarkshire, said there was "strong unity but also desperation" during the protest. She said: "The £5m is a drop in the ocean when you think we will be losing 4p on a litre and there are 5.5 billion litres produced in a year [in the UK]. We still need to do a lot more." SNP MP Dr Eilidh Whiteford called for the UK Government to "increase pressure on the major retailers and processors to provide producers with a return that properly rewards their commitment and reflects the cost of production". The NFU praised some retailers – including Sainsbury's, Tesco, Marks & Spencers and Waitrose – for paying a fair price for their pints. British Retail Consortium food director Andrew Opie said: "Supermarkets are the best payers in the milk market. "The pressure should be on other big buyers of milk – food manufacturers and the public sector – to show the same strong support for the industry that retailers do." "Farmers in the best position are often those in supermarket supply chains."

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Angry farmers declare war on supermarkets

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