Archived press release

Farmers warn of exodus from dairy sector as they struggle to break even

7 September 2007

Low prices are leading to a crisis in UK dairy farming, a new survey by Friends of the Earth warns today. Without intervention the dairy sector, which is currently under investigation by the Competition Commission, could face an exodus in just a few years' time, leading to an increase in imported dairy products. Many farmers currently find it impossible to invest in their businesses at all, let alone to tackle critical environmental concerns on their farms.

While prices paid to farmers have risen since the survey took place, the highest are still only equal to prices farmers received ten years ago and their costs are also rising sharply. In a recent working paper on the grocery supply chain the Competition Commission noted that "the number of dairy farmers had declined significantly, indicating that many individual dairy farmers may have experienced difficulties". Friends of the Earth wants the Competition Commission to acknowledge the supermarkets' role in pushing down prices and then to take action to redress the balance of power in the dairy supply chain.

Dairy farmer Michael Bootham said:

"The price rises we are being offered from October would mean I would be getting the same price for my milk now that I was getting over ten years ago and my costs have gone up. And there is no guarantee that the price won't go down again as it has done over the last 10 years - at the moment I am only receiving 19 pence per litre. The supermarkets say they provide what their customers want but if they don't pay a fair price more and more dairy farmers will leave the industry and shoppers will find it harder to buy British diary products"

Dairy farmer Brian Wainwright said:

"There is a lot of talk at the moment about milk prices going up but farmers costs like feed and fuel are going up all the time too. And the government's new proposals for pollution prevention on dairy farms will need major investment that some farmers will simply not be able to meet unless prices go up significantly. Farmers want to do their bit to encourage wildlife and look after the countryside but supermarkets and the milk processors are pushing the price to farmers so low that it's hard to make a living let alone invest in your business or in measures to protect the environment. Unless things change I won't be farming in ten years time"

Sandra Bell, Food Campaigner for Friends of the Earth said:

`These farmers' testimonies provide a disturbing snapshot of the state of the dairy industry and of the role of the supermarkets in it. The Competition Commission must urgently redress the balance of power in food supply chains and ensure that farmers are protected from unfair trading practices. Unless farmers can be confident of a sustained fair return for their milk they will not be able invest in the critical environmental measures that shoppers increasingly want to see.'

Key findings include:

• Most dairy farmers responding to the survey are not covering their costs of production
• The overwhelming majority of respondents think supermarkets exert the most influence over the price they receive
• Most farmers responding to the survey do not expect to be farming in 10 years
• Low prices are hindering farm investment, particularly environmental measures on the farm such pollution control or conservation work.

Friends of the Earth is calling on the Competition Commission to appoint a watchdog to oversee the grocery market and to ensure fair trading between supermarkets and their suppliers. The watchdog would proactively monitor relationships between retailers and their suppliers and would have the power to resolve any abuse of power by retailers.

Full briefing: www.foe.co.uk/resource/media_briefing/farmers_speak_out_over_the0.pdf (PDF† )

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If you're a journalist looking for press information please contact the Friends of the Earth media team on 020 7566 1649.

Published by Friends of the Earth Trust