Farming Minister Jim Paice infuriated 2,500 already angry dairy farmers by telling them they should be cutting their production costs.
He told a packed meeting in London – called to protest at big retailers and processors slashing payments to suppliers – that farmers should be helping themselves by taking a close look at their overheads and seeing where cuts could be made.
The response was loud boos and heckling.
British dairy farmers – exasperated by latest pay cuts imposed on them by milk processors – get their message across at the National Farmers’ Union Dairy Summit in Westminster, central London. Picture: Dominic Lipinski
“He was given a very rough ride indeed,” said Neil Parish, Conservative MP for Honiton and Tiverton, who attended the meeting together with 400 dairy farmers from the Westcountry.
“I have never encountered such a huge strength of feeling from farmers like this,” he said, speaking as the crowds dispersed from Central Hall, Westminister.
“Quite simply they’re not getting enough money to pay their bills and it’s a situation that cannot be allowed to continue, because they will simply go out of business.
“We must name and shame the supermarkets involved, and the processors who supply them must put right the cuts they are threatening to introduce on August 1.”
The cuts mean many dairy producers will be losing up to 5p per litre on every drop of milk. It costs around 30p to produce a litre, and the cost of feeds, fertiliser, fuel and energy keep rising.
The latest cuts, from the big dairies Arla Foods UK, Robert Wiseman Dairies (with a major new factory at Bridgwater), Dairy Crest, and the co-operative First Milk, brought anguish to an already cash-strapped dairy sector.
“Until Jim Paice started talking about us helping ourselves by cutting costs of production the meeting was going well,” said Mark Oliver, deputy chairman of the National Farmers’ Union (NFU) South West regional dairy sector board.
“It wasn’t exactly a helpful remark when we work so hard to produce milk and are really angry about the behaviour of some big retailers.
What Mr Paice said caused real resentment towards him from the floor.”
Mr Oliver, who farms at
Lanhydrock, near Bodmin, said he had never before been to a dairy farmer meeting that had engendered such intensity and passion.
“The industry is up in arms and demanding urgent action,” he said.
“Jim Paice began by assuring us that the Government’s voluntary code of practice for retailers was nearly in place – but we all very much doubt it will be enough to solve the problem, and it certainly won’t come soon enough to help those farmers facing yet more cuts from the start of next month.
“Farmers are looking for dynamic, quick action, but Mr Paice was talking about things he just couldn’t do quickly.”
But the meeting was successful in raising the whole profile of that was happening to dairy farmers, he insisted.
“If it achieves the sort of publicity it should, it may have scared processors into realising they cannot run roughshod all over us,” Mr Oliver added.
“The farmers who are directly affected want to see these payment cuts reversed before the Olympic Games begin. Otherwise you’ll find them tipping their milk down drains in protest.”
Mr Paice told the meeting: “We are determined to do everything we can to make the market work more fairly and re-balance the power in the market place.
I shall continue to use my position to bang heads together, to encourage and cajole the whole of the supply chain to take responsibility for this situation and find a better way for this industry to flourish.”
The Government has also announced an extra £5 million from the rural economy grant scheme to “help dairy farmers be more efficient”.
Mr Paice, who called yesterday’s Dairy Summit for NFU and Farmers For Action members, had angered farmers on the eve of the event by telling a radio interviewer that he did not know the price of a litre of milk in the supermarkets, because his wife did most of the shopping.
He was roundly condemned by industry leaders for his ignorance.
Farmers For Action chairman David Handley said dairy producers needed their money back before talks about the future of the industry: “because it’s no future with no money”.
Mr Handley, who originates from Camelford in North Cornwall, warned that if the cuts were not reversed by the end of the month “we shall have no option but to show them what we are capable of”.
Farmers are seeking improved contracts to ensure their payments cannot be cut at very short notice.
Some of the major supermarket chains, Tesco, Sainsbury’s, Waitrose and M&S, already support their farmers with a cost-of-production payment, based on a tracking system. But Morrisons, Aldi, Asda and the Co-Op do not.
The farmers’ cause has gained widespread support. Andrew George, MP for St Ives and chairman of the Grocery Market Action Group, said: “The current situation is unsustainable.
Of course the Government cannot regulate or set prices, but the proposed Supermarket Watchdog (Grocery Adjudicator) should be empowered to take account on supplier contracts which respect the maintenance of an agreed farm-gate price, and to protect suppliers from short-notice changes which make the contract unsustainable.”
And Deborah Meaden, of BBC2’s Dragons’ Den, said: “A fundamental rule of business is to be able to sell your product for more than it costs you to make.”
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