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Farmers And Scottish Govt Round Table On Milk

10 February 2011

UK - Scottish dairy farming representatives have met in private with Scotland’s Cabinet Secretary for Rural Affairs, Richard Lochhead, to discuss the long and short term challenges facing Scotland’s dairy farmers. The meeting took place on a dairy farm near Stirling this week.

Dairy farmers highlighted the current pressures on producers, where returns well below the cost of production are undermining confidence in the future and stifling business development on even the most efficient well-run dairy farms. The farmers said there is an urgent need to address the serious imbalance within the dairy supply chain and for strong commodity markets for dairy products to be better reflected in farmgate prices. The group also sought support from the Scottish Government for the position of producers to be strengthened in the longer term by better contractual and negotiation terms, as recommended by the High Level Group looking at dairy issues in Europe.

NFU Scotland President, Jim McLaren, who attended the meeting said:

“Dairy farmers at this meeting were reassured that the Cabinet Secretary was well aware of the huge financial pressures that all producers are currently under, with the vast majority of those milking cows in Scotland continuing to receive a milk price that is significantly below the cost of production. The reality is that without a significant price shift the prospects for dairy farming in Scotland are currently bleak.

“This meeting was all about looking for solutions – both short and long term. Momentum behind the creation of a much-needed adjudicator for the retail sector must not wane. If given the appropriate remit, such a body should have the potential to examine why the dairy supply chain continues to badly serve those in the job of producing milk. Although a reserved matter, Scottish Government support for a meaningful adjudicator to be established is important.

“We also want to see buy-in from all politicians to many of the recommendations from the High Level Group in Europe. These would aim to strengthen the contractual and negotiating position of producers or producer groups. If backed by more effective milk contracts, these recommendations could help address the lack of power that producers currently hold within the whole supply chain.

“With the potential for improved producer strength, we would also wish to see the Scottish Government consider what support could be given in the future to assist producer groups or organisations to look at investment opportunities that would process and add value to milk produced here in Scotland.”

Cabinet Secretary for Rural Affairs, Richard Lochhead said:

“It is ridiculous that any sector should receive less for their goods than they cost to produce.

We need to protect the viability of our dairy farmers - we don’t want to live in a Scotland that cannot produce its own milk.

“The pressures on the sector are enormous and I will continue to call upon the UK and European administrations to improve producers’ negotiating powers. The recommendations of the EU High Level Group are being taken forward particularly on contracts, producers power and supply chain transparency all of which should improve flexibility.

“I have asked retailers to list the actions they are taking to implement the Retailers Charter which they signed up to in 2009 and how they plan to respond to the increases in farmers overheads. Progress on a 'Supermarket Ombudsman' has been made by the coalition government proceeding with the installation of a Groceries Code Adjudicator of the Office of Fair Trading.”

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