Originally from: David
                        
http://www.thisisgloucestershire.co.uk/displayNode.jsp?nodeId=74375&command=
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 PAY RIGHT PRICE FOR WHITE STUFF

 10:30 – 05 September 2002

 Tesco has called for farmers to be paid more for their milk to stop them leaving the industry.

 Farmers back calls to have 2p milk rise

 Farmers in Gloucestershire have welcomed proposals for a 2p a litre rise but say it may not be enough.

 The supermarket chain issued a statement saying the future of the diary industry needed safeguarding.

 It said there should be the minimum increase of 2p a litre from October.

 This would restore prices to the level last spring before dairies cut farmers' milk cheques.

 Jan Rowe has a 180-strong dairy herd at Whittington, near Cheltenham. He is "very glad" to hear of the calls.

 "I am aware that Tesco has suggested that farmers should get a bit more money," he said.

 "I think they are realising that farmers are producing milk at below the cost of production at the moment and that is unsustainable in the long run."

 Mr Rowe said farmers are paid about 16p or 17p for a litre of milk which he believes costs 20 to 22p to produce.

 "Even a 2p rise, although it is helpful, is not going to completely solve the problem," he added.

 Ben Pullen has a dairy herd of 160 at Home Farm, in Churchdown.

 He said: "It's certainly welcome news and it is a move in the right direction.

 "As prices are at the moment, they are absolutely unsustainable. Unless there is a huge price rise an awful lot of people will go out of business this winter."

 He said he was "a little guarded" at the lead Tesco was taking and called on the chain to stop importing cheaper cheese.

 "The cost situation is different for every farm. To get a return on capital and be able to reinvest in our business we are looking towards 21p a litre, but 20p would help tremendously," he added.

 Tesco's calls were denounced as inadequate by leaders of Farmers For Action, which is to step up its campaign of blockading creameries and supermarket depots.

 EFA chairman David Handley said it was "nonsense" for Tesco to comment on the liquid market, which accounts for half of Britain's milk output, when it was importing other dairy produce including cheese.

 He said the company buys South African cheddar for £1,690 a tonne, a fraction of what it costs to produce in the UK.

 National Farmers' Union regional director Anthony Gibson warned dairy farmers could be forced into direct action to achieve a better price for their milk.

 He said his members could not be blamed for concluding the market was rigged.

 The NFU has pulled back from supporting demonstrations and pickets like those organised by Farmers For Action.

 It has issued a list of dos and don'ts to office-holders and officials warning them about supporting action which could be construed as damaging to processors or retailers.

 But Mr Gibson has come under pressure from South West farmers, who say the union is doing nothing while the milk crisis deepens and more producers quit the industry.

 His remarks fall short of encouraging farmers to take action but he says frustration is understandable, when market conditions suggest prices should have improved.

 "Virtually everything that has happened since the spring should have been positive from the milk producers' point of view," he said.

 "The pound weakened against the euro, commodity prices stabilised, there has been a massive producer investment in processing capacity and we are looking at tighter supply during the winter.

 "Farmers are constantly being told they can't buck the market.

 "But the same doesn't seem to apply to dairy processing companies and supermarkets, who appear to be able to manipulate the market against the producers' interest with the connivance of the so-called competition authorities.

 "If prices do not start to rise quickly and significantly, then dairy farmers could not be blamed for concluding that the market is rigged and that all the talk about partnership in the food chain is just hot air."