DAIRY farmers gathering to protest in Lanark today about the squeeze by supermarkets and major processors on prices will hear about moves by the Scottish Government to come up with a statutory solution.

Rural Affairs Secretary Richard Lochhead will tell around 500 farmers, who are expected to gather at Lanark Auction Mart, that progress on a voluntary code of practice between producers and processors was "only one piece of the jigsaw".

"I will update the local farmers on our progress to date, which also includes continuing with our plans to consult on legislation, that will provide a statutory framework for the recently agreed EU dairy package," he said.

Mr Lochhead added: "Our dairy farmers are getting the rawest deal of everyone in the supply chain, clearly being squeezed by intense competition in the retail and milk processing sectors.

"If retailers want to discount the price of milk on their supermarket shelves to try and attract footfall because of the cut-throat competition between them then it shouldn't be the dairy farmers that pick up the bill for this.

"That is why we must do all we can to provide protection for our dairy farmers to ensure a much fairer environment for people to trade within."

He said it was good news that many of the major milk suppliers such as Wiseman, First Milk, Dairy Crest and Arla had now reversed price cuts in the face of public opinion and the anger expressed by farmers.

He said "That is to be welcomed and I hope all processors not only follow suit but work with farmers to identify solutions across the whole supply chain."

Threatened cuts of around 1.7p per litre to the price paid to farmers of between 26p and 27p per litre prompted several days of protests and blockades.

Labour's rural affairs spokeswoman Claudia Beamish, who will also attend the rally, welcomed the recent suspension of these cuts as showing growing momentum in support for the farmers.

She said: "The proposed price cuts pose a real threat to the livelihoods of dairy farmers across Scotland and in recent weeks we've seen momentum gather with the agreement in principle for a code of practice and announcements that some retailers will increase the price they pay.

"These moves will help ease the short term crisis facing the sector, but more work is needed to address the underlying imbalance in favour of retailers that exists in the supply chain."

Ms Beamish added: "In the longer term, we need to see the Scottish and UK governments working together to deliver the best possible deal for Scottish farmers and, if necessary, legislate to level the playing field.

"I am pleased with the strong way in which the sector has come together to oppose these price cuts and to gather public support for the campaign."