Milk processors reject low price jibe
15 March 2000
Milk processors reject low price jibe
by FWi staff
DAIRY processors have rejected the accusation that they are driving farmers out of business by paying the lowest price for milk for decades.
But producers have claimed there is no reason for British prices to be the lowest in Europe when there are big profits to be made from processing milk.
Milk prices have slumped in to their lowest level in real terms since the 1970s and some producers are receiving as little as 15p per litre.
But Jim Begg, director general of the Dairy Industry Federation, said farmers problems were market-driven and not the fault of the industry at large.
Processors could only pay a price for milk which was related to the marketplace, Mr Begg told the Farming Today programme on BBC Radio 4.
“When you look at the recent situation with the pound appreciating significantly since milk prices were last nationally determined, that sets the tone for the whole marketplace.”
Mr Begg rejected the suggestion that processors who are making money out of milk should pass some of their profits back to cash-strapped farmers.
“The market is very competitive, the situation with the pound is making imports very competitive, processor have to match that,” he said.
“We have to be efficient and we have to be competitive or else our customers will buy their products elsewhere.”
Mr Begg described the slump in the sector, which has seen raw milk prices fall to as little as 15p/litre, as a “dynamic of the Common Agricultural Policy.
“Its certainly not the processors who are responsible for that,” he said. “Thats a dynamic of the CAP and the single market.”
Mr Begg said he had every sympathy for producers. But picketing milk plants and blockading factories would not is going to help the situation, he added.
“If we disrupt the supply of products to our customers theyll simply go somewhere else and well lose out on the marketplace.”
But Ben Gill, president of the National Farmers Union, said there was no reason for farmers to suffer when there was “a booming liquid milk market”.
The dairy industry was “badly organised” in terms of transport and British farmers were paid the lowest price for milk in the Europe Union, he said.
“If we could knock heads together we could end up with a benefit to the industry of 1p a litre, £130m a year,” said Mr Gill.
“That requires integration, and a streamlined efficient dairy chain to be developed.”