More dairy strikes planned over farmgate prices

By Anita Awbi

- Last updated on GMT

Related tags: Milk, Supermarket

British farmers are planning another strike in protest over low
prices paid by retailers and processors for their goods, adding to
calls from MPs and lobby groups for mandatory legislation to force
supermarkets into line.

The organisers, Farmers For Action (FFA), hope that the five-day strike, planned for the first week in December, will draw media attention to the fact that many farmers in the UK are paid below cost price for their produce.

But the National Farmers Union has criticised strike action, and a spokesperson said he could not condone farmers breaking their contracts with retailers.

In response FFA chairman David Handley says a repeat of the November 3 three-day protest - which saw up to 4,000 British farmers break the supply chain and throw away produce - is necessary if the food industry continues to ignore demands for a fair trade deal.

"I don't think the supermarkets will take any real action, they will only come out with soundbites,"​ said dairy farmer Handley.

"We want to turn up the heat as the current OFT [Office of Fair Trading] supermarket monopoly inquiry gets going because they can push for protective legislation on our behalf and that is the only way to deal with this situation."

Over recent years Handley has watched the grocery sector expand into what he calls a "retailing dictatorship"​, claiming price wars between the top three or four supermarket chains have forced staple food prices so low that many farmers have gone out of business.

He claims that around 5000 dairy farmers have gone out of business since 2000, and fears the FFA "may have left it too late to protect those remaining".

British processors currently pay milk producers an average of 18p per litre, down from 25p back in 1996 and easily the lowest price in the old 15-member European Union, according to the Milk Development Council.

But the average cost of producing milk remains about 20p per litre in the UK.

Dairy processor Robert Wiseman announced that it would have to cut farmgate milk prices in early 2006 after this week reporting a 22 per cent drop in profits for its first half of this year.Handley said: "It's not just about dairy producers though. More farmers have come on board to support our actions. We represent beef, sheep, cereal and fruit and vegetable farmers too, and their plight is more serious than ours. They have cheap foreign imports to contend with."

Other pressure groups are calling for government intervention to redress the imbalance, hoping that the voluntary Supermarkets Code of Practice governing the supply chain will be rewritten and made compulsory - which could cause problems for retailers' produce-sourcing throughout the UK.

Lobbyists want to see the introduction of legislation similar to that in Germany, to stop British supermarkets selling goods at lower than the cost of production.

Robin Webster, supermarkets campaigner at Friends of the Earth, explained: "The code was written by supermarkets for supermarkets. This needs to be looked at - it needs to be made mandatory and given teeth."

Related topics: Markets, Pricing Pressures

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