SCOTTISH dairy farmers supplying the farmer-owned business First Milk have been dealt a further blow with the announcement that prices are to be cut once again.
The majority of Scottish suppliers to First Milk are to see prices cut by a further 0.2p per litre for June while those on the Island of Bute will see prices cut by 1.2p per litre, to as little as 16p per litre.
The latest price cuts were announced as part of a wholesale business review, revealed by new Chief Executive Mike Gallacher, aimed at turning around the Renfrewshire-based company's fortunes.
The business plan included a number of cost reductions across First Milk, including potential job losses primarily at its Glasgow head office, and a change to milk pricing policy which will see member suppliers allocated to one of seven "milk pools".
The price for producers on Bute has been most severely affected due to the costs associated with transporting milk off the island. It is understood that First Milk's chief executive, Mike Gallacher, will meet with dairy farmers on the island today[sat].
NFU Scotland and First Milk have been pressing Scottish Government to extend existing subsidised ferry transport to milk tankers and a meeting with Transport Minister Derek Mackay will be held in the Scottish Parliament later this month.
NFU Scotland President Allan Bowie said: "We can appreciate that restructuring and turning around a business often means pain, but for Scottish dairy farmers supplying First Milk these further cuts will place them in a hugely difficult position.
"We know that a number of First Milk members have already taken the difficult decision to walk away from milk production and those that remain have some challenging business decisions to make.
"Given that this is a co-operative, it will rankle with many Scottish producers the price differential now opening up between those supplying different parts of the First Milk business. Many Scottish First Milk suppliers are staunch, lifelong supporters of co-operation, with an expectation that pain and gain should be shared."
He added: "For Kintyre and Bute, where dairying is a huge part of the local economy."
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