UK: Dairy farmers offered hope of ‘added clout’

DAIRY farmers are being given the chance to bid for grants worth up to �25,000 to help them become more competitive when selling their produce.

The money will come from a �5million cash-pot set up in the wake of controversy earlier this year, which saw dairy farmers protesting about the low prices supermarkets were paying them for milk.

Farming minister David Heath said he would also bring in new rules to allow farmers to set up “producer organisations” and sell their milk in bulk, giving them more clout to negotiate prices with powerful buyers.

Mr Heath said: “We’ve already got the industry code of practice, and negotiating as groups rather than individuals will give dairy farmers an even louder voice to get their just rewards from the marketplace.

“Our �5m dairy fund will also allow producers to develop other means of cooperation and grab business opportunities with both hands.”

Most dairy farmers currently negotiate with supermarkets and food processors as individuals, but this has often meant big companies could use their powerful market position to enforce low prices on farms that did not cover the cost of producing milk.

Today, Mr Heath launched a consultation which will end in January on new rules to make it easier for individual farmers to team up and negotiate fairer prices together.

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The �5m dairy fund will allow farmers to apply for grants to explore new business opportunities, such as investing in new technology or covering the costs of setting up a producer organisation.

Mr Heath pointed out that the UK currently imports �1.2billion more of dairy produce than it exports, meaning there is huge potential for growth in domestic and export sales.

NFU chief dairy adviser Robert Newbery said: “The NFU believes that collaborating and adding value to raw milk can be an extremely powerful means by which farmers get a fairer share of the end value of dairy products.

“The �5m funding will help groups of dairy farmers to explore all forms of collaboration, including forming Producer Organisations (POs) to improve their bargaining power and add value to milk.

“The NFU will be assisting groups of farmers who want to form POs, by facilitating communications with the NFU farmer database, with the provision of technical guidance and also lobbying.”