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Morrisons to create new milk brand for farmers Morrisons to create new milk brand for farmers
(about 1 hour later)
Morrisons will sell a new milk brand which will see 10p paid per litre to farmers, the company says.Morrisons will sell a new milk brand which will see 10p paid per litre to farmers, the company says.
The move comes after farming industry leaders met bosses of the supermarket chain to discuss the price of milk.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. The Milk for Farmers brand means a four pint bottle (2.27 litres), which now sells for 89p, will cost an extra 23p.
Dairy farmers say they are struggling to stay in business because of a sharp drop in the amount they are paid. Dairy farmers, who say they are struggling to stay in business because of a sharp drop in the amount they are paid, hailed it a welcome "first step".
The industry says a reduction in global demand for milk has led to an over-supply in the UK, creating difficult conditions for many dairy farmers.The industry says a reduction in global demand for milk has led to an over-supply in the UK, creating difficult conditions for many dairy farmers.
On Monday farming unions met to develop an action plan calling for labels to indicate British products and long-term contracts for farmers. The extra money from the Morrisons's brand will be given directly to farmers within Arla, Britain's biggest milk co-operative.
Farmers have also been staging protests, including taking two cows into a supermarket in Staffordshire. 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. It will go into stores in the autumn."
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. NFU President Meurig Raymond said the move by Morrisons is a "welcome first step".
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. "We will continue to urge Morrisons and all retailers to ensure that farmers from all sectors who supply their food get a fair price."
"All of that premium will go directly back to the farmers that supply our processor Arla. The National Farmers' Union said that currently Waitrose, Marks & Spencer, Tesco, Sainsbury's and the Co-op have arrangements where a farmer is paid a price above the cost of production for milk. Asda, Lidl and Aldi currently do not offer such deals to farmers.
"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 has milk demand slumped?
Why is the milk row happening?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. Representatives from Morrisons 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.
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. On Monday farming unions met to develop an action plan calling for labels to indicate British products and long-term contracts for farmers.
Conservative MP Simon Hart, who is a member of the Environment, Food and Rural Affairs Committee, described the new milk brand as "a start". Farmers have also been staging protests, including taking two cows into a supermarket in Staffordshire.
"I wouldn't put it much more strongly than that, but... I do think things like sourcing, labelling and pricing are important contributions that supermarkets can make."
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.
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.
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".
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.
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.
"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' 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. 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."