Farmers threaten to pour milk down the drain

Producers object to sharp cuts in price they get

Thousands of litres of milk could be poured down the drain this summer in protest at deep cuts to the price paid to farmers. More than 1,000 farmers are expected to attend a meeting in central London this week to agree a battle plan after the amount paid by some processors fell to 6p a litre less than it costs to produce.

Farmers were hit with a 2p cut in June, with just four days' notice while still being tied into a contract for a year. Another cut of up to 2p is being made in August.

With floods hitting large parts of the country, farmers are being forced to keep cattle in barns, eating feed which would normally have been saved for the winter, driving up costs.

David Handley, the chairman of the Farmers for Action campaign group, said farmers were so desperate they were prepared to destroy supplies.

"If by August 1 we have not got anywhere, disruption of the milk supply chain will take place. In the last resort, dairy farmers will be willing to let their milk go down the drain until something changes. That's a very sad thing to have to do, but I think we have got public support."

Mr Handley warned supplies to the Olympic Games and related events could be disrupted, adding: "The opening ceremony is promoting the countryside. Yet the Government isn't listening to us, just using us as a marketing opportunity."

The three big milk processors, who supply the catering and food production industries as well as supermarkets and convenience stores, have all cut the prices they pay farmers. Robert Wiseman Dairies blamed "the substantially lower returns from the markets" for its decision to cut its price by 1.7p to 24.73p.

A spokesman for Arla Foods, which is cutting its price by 2p to 24.5p, defended the move. A spokesman said: "We fully understand that emotions are high and doing all we can to get better prices." Dairy Crest is cutting its price by 1.65p to 24.92p.

The average farm produces one million litres of milk a year. The price paid to farmers varies. Sainsbury's and Tesco guarantee to meet the cost of production, and pay around 30p. But others only promise a small premium on the producers' base price, which means Morrisons pays 25.92p, Co-op pays 25.73p and Asda pays 25.5p. Farmers without supermarket deals will be hardest hit.

Britain is a nation of fresh milk lovers, but a trend to semi-skimmed has caused a headache for processors who have to remove the cream. A quarter of it finds its way on to supermarket shelves in pots, but the rest is sold on the commodity markets and exported where the price is dictated by global demand.

Whole milk now accounts for just a fifth of fresh milk sales.

Peter Kendall, the president of the National Farmers' Union, said: "A lot of farmers feel very uneasy about throwing milk away, but I can see some holding back supplies. We need to see these price cuts reversed. Dairy is the biggest agricultural sector. It is the backbone of rural communities. We are going to see irreparable damage done."

Jim Paice, the farming minister, has insisted the Government cannot interfere in the market, but he will attend Wednesday's meeting.

He said the price cuts were "a heavy blow" for the industry and has promised to "bang heads together" to strengthen the industry's voluntary code of conduct.

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