Dairy farmers strike over low prices paid by supermarkets

Almost 4,000 farmers are expected to halt supplies of milk to dairies for the rest of the week and instead give away or dump hundreds of thousands of pints of milk. Farmers will also stop taking livestock, poultry and vegetables to market.

David Handley, chairman of Farmers for Action, a militant campaign group organising the protest, said farmers were being bankrupted by supermarkets forcing down wholesale prices.

Unless retailers and the Government signalled they were listening to the protests, the group threatened week-long strikes in the approach to Christmas. Mr Handley, who played an influential role in the fuel protests that paralysed the country in 2000, advised consumers to stock up on perishable food.

Farmers' growing militancy is in response to a squeeze on prices by the big store chains. Competitive tendering for supermarket contracts has prompted the leading dairy processors - Arla, Dairy Crest and Robert Wiseman - to offer ever cheaper milk. Margins have been maintained by slashing the price to farmers.

The Milk Development Council says that farmers now receive about 18p for a litre of milk - about 1p less than the cost of production. Ten years ago they were receiving about 25p. Meanwhile, supermarkets are taking 10 times as much money from a litre of milk as they were a decade ago.

For Mr Handley, the squeeze is evidence of a national policy of "cheap food" that has been causing more food to be imported from countries with lower hygiene and animal welfare standards. Avian flu could devastate the poultry industry, he warned, because of the decision by the supermarkets to buy cheap poultry from the Far East. Yet the consumer was still paying the same price, he claimed.

Mr Handley, a dairy farmer in Monmouthshire, said that until 1998 the three sides in the dairy business - the farmer, the processor and the retailer - were making a "fair living".

According to the Milk Development Council, about 1,000 dairy farmers are quitting the business every year. Ian Potter, a businessman who trades EU milk quotas that authorise dairy farming, said morale in the dairy industry had sunk to dangerously low levels. "The strike is an indication of how desperate and frustrated dairy farmers are," Mr Potter said. "It's not something any of them wish to take part in but they just think all other means are failing them."

The NFU, the farmers' union, is urging its members not to break commercial contracts by joining the strike, though it agrees that many dairy farmers receive "pitifully low wages".

But Norman Baker, the Liberal Democrats' agriculture spokesman, said the party had deep sympathy with the strikers. "We have a clear case of market failure where the big are able to exploit the small."

'Everything is going up - but not our prices'

Peter Parkes, 49, farmer

Peter Parkes works every day on his dairy farm, starting at 6am and rarely finishing before 7pm.

But for the past three years the former aircraft engineer and his wife, Youleite, have made a loss at Kinnersley Manor Farm, near Reigate in Surrey. Last year they racked up a loss of £7,000, even though it has a better deal with a dairy processor than many farmers.

Mr Parkes took over the tenancy of the farm from his parents six years ago because he wanted a change from his job servicing aircraft at nearby Gatwick. He rues his decision. "We have had a dreadful time of it," Mr Parkes, 49, said. The farm has 100 milking cows, 70 calves and bulls and 55 beef cattle.

Frustration at the state of the industry has led Mr Parkes into conflict with the authorities. Last month he and his wife were arrested during a protest outside a plant of one of the big three milk processors, Arla.

At Lewes magistrates' court, he admitted causing an obstruction when he refused to move from in front of a delivery tanker and was given a six-month conditional discharge.

Mrs Parkes said: "Everything is going up - the feed, the machinery, the fuel, but we are not allowed to put up our prices."