Action considered on milk prices

Jul 12 2012

Legislation to address milk prices could be introduced in Scotland, rural affairs secretary Richard Lochhead has suggested.

He said he is "willing to consider" Scottish legislation to address the issue of cuts made to the price of milk price paid to farmers, warning that the current supply chain is dysfunctional.

He said the industry needed to find ways to alter the relationships between different parts of the supply chain in order to stop dairy farmers going out of business.

On Wednesday, dairy farmers warned they are being pushed to the brink by the latest cuts to the price they are paid for their milk, as more than 2,500 of them gathered in London to protest against the reductions.

The farmers are angry at the latest round of cuts of up to 2p per litre, which come on top of similar cuts in the spring, recently announced by major milk processors. They say the cuts will force many farmers out of business, pushing up the price of milk for consumers in the long term.

Mr Lochhead said farmers were facing higher costs, but receiving less money for the milk they produce. He is meeting farmers to discuss what action can be taken in Scotland to stop the industry being deserted.

Speaking ahead of the meeting, Mr Lochhead said: "It's clear that action is needed now if Scotland, and indeed the rest of the UK, is to ensure that our dairy farmers can continue in business.

"Farmers face rising production costs but are receiving less for the milk they produce. That's dysfunctional. The primary producer is a price taker and is the first victim of falling prices yet it is on them that the whole supply chain depends.

"Many of the issues facing the sector are long standing and every time we think we are beginning to move on to brighter pastures, the dysfunctional supply chain and market comes back to haunt us. If we can't find ways to alter the fundamental relationships between different parts of the supply chain then farmers will be put out of business and the processors and retailers and ultimately the customer will be denied the milk on which they all depend.

"Farmers' frustration and anger is both understandable and palpable and the incredible turnout at the Westminster meeting demonstrates this."