Dairy Crest’s offer includes a price rise of 2 pence per liter for milk supplied for cheese processing, but not for liquid milk (UK penny = U.S. 1.8 cents). The company’s owners have made it conditional on other cheese processors upping their prices. To date, Glanbia and McLelland, the UK’s third largest cheese company, have also agreed to the price increase.

Dairy Crest’s decision was made in late November, following a meeting where for the first time three farmers organizations—the National Farmers Union, its counterpart in Scotland, and Farmers for Action (FFA)—joined forces to meet with major retailers.

The FFA was a prime mover behind the protests. Chairman David Handley described the farmers’ efforts in an interview with Farmers Weekly. “During recent demonstrations,” he said, “members from the Isle of Bute [in Scotland] crossed by ferry to the mainland, protested and then paid to hire a boat to get home in time for morning milking. They then returned on the ferry to collect their cars. That is real commitment to our industry. There was tremendous support from non-milk producers. The camaraderie on the picket line was terrific. People who had been depressed had their spirits lifted because they knew they were doing something to get a better deal.”

The response to the deal among farmers and their representatives has been mixed. Scottish National Farmers Union (NFUS) president John Kinnaird said, “I believe the announcement marks an important breakthrough and must now pave the way for further positive price developments in coming weeks.”

“We have yet to see anything from this offer,” said Youleite Parkes in a phone interview January 3. She and her husband Peter, the FFA coordinator for the county of Surrey in England, are dairy farmers in Reigate, a town in Surrey, and have participated in recent pickets and blockades of Dairy Crest plants in the area. “Many farmers in the southeast produce liquid milk so they will not benefit,” Youleite Parkes said. “Consumers are paying more and the dairies and supermarkets are pocketing that rise. We will negotiate in January to see if we can get a rise in the price of liquid milk,” she added, “but we are definitely ready for more action if we don’t.”

This was confirmed by Bruce Horn, a beef farmer and the FFA coordinator for the county of Hampshire in southern England. “Our members are used to taking action now and they have been asking when will we go out again. I’m not very happy with the offer. Many dairy farmers in Hampshire supply dairy co-ops, not Dairy Crest, and will not see anything from this offer.” Two co-ops, First Milk and Dairy Farmers of Britain, have implemented price increases substantially below that of Dairy Crest, while the Milk Link co-op has made no increase at all.

Following the farmers’ actions, the British Parliament announced in late November that it would hold an inquiry into milk pricing. “There is now a running theme that the supermarkets have farmers in an armlock over farm gate prices and this is none more so than for our dairy farmers,” said Liberal Democrat Party spokesperson Andrew George.

The recent protests have been a reaction to the long-term decline in farmers’ returns—in particular, the percentage of the retail milk price that they receive. In 1995 farmers were getting 47 percent of the liquid milk price, but by 2000 this had fallen to 35 percent.

Some farmers have cranked up output in an effort to compensate. November milk production was the second highest on record. “Some of the bigger farmers are able to increase production,” explained Bruce Horn, “but it is not going to help us. Individuals think that they can get a good deal, but the majority of us cannot. We have to stick together.”

To expand production, farmers often have to buy a production quota from the government to overcome state-imposed limits on production that are used to try to control prices, regardless of the human need for milk or other farm products.

“Only the best-off farmers can afford to buy quotas,” said Youleite Parkes. “It costs 9-10 pence a liter of milk to lease some-one else’s quota, or 20-27 pence a liter to buy a quota. We cannot do that and hope to cover the costs of production, so it is not an option for us.”

Horn noted that “we also face other challenges—the government is threatening to bring in a new tax on the use of pesticides.” Chancellor of the Exchequer Gordon Brown raised the proposal in December. “They claim that this is being done to protect the environment,” said Horn, “but all that will happen is that farmers will have to pay more for the use of pesticides and more money will be transferred from the farmer to the government, alongside all the other taxes that they have introduced.”

Further negotiations are due to take place over milk prices. “It is now vital that we maintain the momentum that we have built up over the past two months to secure further increases in liquid milk prices,” said Terrig Morgan, chairman of the NFU’s dairy section.  
 
 
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