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Farmers meet Morrisons supermarket over milk prices Morrisons to create new milk brand for farmers
(about 1 hour later)
Farming industry leaders are meeting bosses of the supermarket chain Morrisons to discuss the price of milk. Morrisons will sell a new milk brand which will see 10p paid per bottle to farmers, the company says.
They say dairy farmers are struggling to stay in business because of a sharp drop in the amount they are paid. The move comes after farming industry leaders met bosses of the supermarket chain to discuss the price of milk.
The brand will be called "Milk for Farmers" and will cost an extra 10p, to be given to farmers within Arla, Britain's biggest milk co-operative.
Dairy farmers say they are struggling to stay in business because of a sharp drop in the amount they are paid.
On Monday farming unions met to develop an action plan calling for labels to indicate British products and long-term contracts for farmers.On Monday farming unions met to develop an action plan calling for labels to indicate British products and long-term contracts for farmers.
Farmers have also been staging protests, including taking two cows into a supermarket in Staffordshire.Farmers have also been staging protests, including taking two cows into a supermarket in Staffordshire.
Representatives from Morrisons are meeting representatives from the UK's four main farming unions - the National Farmers' Union, NFU Cymru, NFU Scotland and the Ulster Farmers' Union, along with lobby group Farmers for Action. Representatives from Morrisons have met representatives from the UK's four main farming unions - the National Farmers' Union, NFU Cymru, NFU Scotland and the Ulster Farmers' Union, along with lobby group Farmers for Action.
Farm gate price Morrisons corporate services director Martyn Jones said: "We will be launching a milk brand that allows customers to pay a little more if they want to support British farmers.
"All of that premium will go directly back to the farmers that supply our processor Arla.
"It will go into stores in the autumn and is aimed at shoppers who want to directly support dairy farmers."
Why has milk demand slumped?
Why is the milk row happening?
The supermarket has been a target for protesters who have stripped milk from the shelves before dumping the produce or giving it away for free.The supermarket has been a target for protesters who have stripped milk from the shelves before dumping the produce or giving it away for free.
Farmers for Action has asked its members not to target Morrisons further as it has agreed to talks and union leaders are hoping other supermarkets will also join the discussions. Farmers for Action has said Morrisons will no long be targeted as a result of the new agreement, but added that direct action against other supermarkets and retailers would continue.
The British not-for-profit dairy organisation AHDB Dairy said the average UK farm gate price - which is the amount paid to farmers - fell to 24.06p per litre in May, a decrease of a quarter over 12 months.The British not-for-profit dairy organisation AHDB Dairy said the average UK farm gate price - which is the amount paid to farmers - fell to 24.06p per litre in May, a decrease of a quarter over 12 months.
Farmers estimate it costs 30-32p to produce each litre of milk.Farmers estimate it costs 30-32p to produce each litre of milk.
Why has milk demand slumped?
Why is the milk row happening?
The National Farmers' Union said that currently Waitrose, Marks & Spencer, Tesco, Sainsbury's and the Co-op have such arrangements where a farmer is paid a price above the cost of production for milk.The National Farmers' Union said that currently Waitrose, Marks & Spencer, Tesco, Sainsbury's and the Co-op have such arrangements where a farmer is paid a price above the cost of production for milk.
Talks are ongoing with Morrisons to get a similar deal, the unions say, while a spokesman for the supermarket said it was not seeking any further reductions in milk prices.
He added: "We recognise that the current issue is being caused by a reduction in global demand for milk that has led to an over-supply in the UK and very difficult conditions for many dairy farmers.
"We will continue our talks with the National Farmers' Union (NFU), in a constructive manner, to finalise our agreed plan of action."
Asda, Lidl and Aldi currently do not offer such deals to farmers.Asda, Lidl and Aldi currently do not offer such deals to farmers.
A spokesman for Morrisons earlier said it was not looking to pay less for milk, and that it recognised that a reduction in global demand for milk had led to an over-supply in the UK.
The NFU said its new action plan formulated on Monday included calls for the government to take action "to ensure that contracts to all farmers are longer-term and fairer in apportioning risk and reward".The NFU said its new action plan formulated on Monday included calls for the government to take action "to ensure that contracts to all farmers are longer-term and fairer in apportioning risk and reward".
It also pushed for rules to be put in place regarding labelling "so that it is clear and obvious which products are imported and which are British".It also pushed for rules to be put in place regarding labelling "so that it is clear and obvious which products are imported and which are British".
The union also said it wanted retailers to "stop devaluing" British food "purely to get customers through the door", and the EU to underwrite the short-term credit position of vulnerable farmers.The union also said it wanted retailers to "stop devaluing" British food "purely to get customers through the door", and the EU to underwrite the short-term credit position of vulnerable farmers.
'Pay market price' Ash Amirahmadi, who is head of milk and member services at Arla - which is a milk co-operative of about 3,000 British dairy farmers - told the BBC Radio 4's Today programme they were asking retailers to pay a market price.
Ash Amirahmadi, who is head of milk and member services at Arla - which is Britain's biggest milk co-operative of about 3,000 British dairy farmers - told BBC Radio 4's Today programme: "Dairy is an important part of the UK economy, but it is an even more important part of the rural economy, and we're asking our retailers to pay a market price. "We're also asking them to agree to mechanisms to deal with that extreme volatility [in supply and demand], and probably as important as the other two we're asking them for long term commitment."
"We're also asking them to agree to mechanisms to deal with that extreme volatility [in supply and demand], and probably as important as the other two we're asking them for long term commitment.
"Farmers need long term commitment to be able to make the investments to deliver a product that consumers want."
'Farmers' unrealistic''Farmers' unrealistic'
Meanwhile, the NFU's former chief economist said it was "unrealistic" for farmers to believe they can be paid "whatever price they think is needed".Meanwhile, the NFU's former chief economist said it was "unrealistic" for farmers to believe they can be paid "whatever price they think is needed".
Sean Rickard told BBC Radio 4's Farming Today that dairy farmers were paid an average of £28,000 a year from the taxpayer.Sean Rickard told BBC Radio 4's Farming Today that dairy farmers were paid an average of £28,000 a year from the taxpayer.
He said: "I think it's unrealistic for anyone in that position to expect us just to pay them whatever price they think is needed to cover their cost of production.He said: "I think it's unrealistic for anyone in that position to expect us just to pay them whatever price they think is needed to cover their cost of production.
"We don't apply that logic to any other industry. Through a combination of factors they're now finding it tough. That is absolutely no reason at all for us to pay them more money than they already get. "We don't apply that logic to any other industry. Farmers have this shield that no other industry has and we shouldn't overlook it really. If they can't survive with their subsidy then, actually, they should give up making milk and live off the subsidy."
"Farmers have this shield that no other industry has and we shouldn't overlook it really. If they can't survive with their subsidy then, actually, they should give up making milk and live off the subsidy."