Can a campaign address the imbalance of power in the milk chain? Yes it can, occasionally!


Graphic from FARM’s milk campaign picking up the statement in the 2004 EFRA committee report that the average dairy farmer earns just £2.90/hr

The following was published in the Lincolnshire Echo May 2007

Back in February I wrote about the Women’s Institute campaign to get a fair deal for dairy farmers and how the WI taking the initiative on a farming issue has fundamentally changed the dynamics of the campaign. 

It is no longer just a few whingeing farmers but a respected consumer organisation and over 100 MPs that are demanding a fair deal for producers. 

I finished the article by saying that it’s not government that has the power to ensure a secure future for the dairy industry but, ultimately, the power to address the problem lies with the bosses of the supermarkets and, on past record, it’s difficult to be confident of their willingness to act. 

How wrong I was.

The announcement that Tesco will increase the price it pays for milk to ensure that the producers supplying Tesco get 22p/litre – the best price currently paid and a full 4 pence above the average – is a welcome development. 

Even better Tesco has said that the farmgate price will rise without increasing the price of milk to the consumer. 

This is significant because until now the retailers have claimed, in the face of plenty of evidence to the contrary, that the farmgate price cannot increase without increasing the retail price – in other words the retail and farmgate price are linked.

The WI and those supporting their campaign, have argued that there is no linkage, and that if there was linkage either the producer should be getting a greatly increased price or the consumer should be paying around 10p/litre less. 

Tesco’s announcement means that at last the retailers are accepting what has been plainly obvious to producers, consumers and politicians – retailers are so powerful that they can abuse the market and, more importantly, are not giving a fair deal to their customers.

Tesco also announced its intention to introduce a local brand of milk sourced from smaller family farms. Initially 150 smaller farms will benefit and if the brand is successful, the possibilities are very significant. 

However, as with all these announcements, the hype is not borne out by the reality. 

The price rises for those supplying Tesco standard milk is not a great as published (probably less that 1p/litre) and requires the producer to sign up to a contract with a fixed price when the price is at last showing signs of upward movement. Nor is it yet clear that the dairy processors will pass the full benefit back to the producers.

Let’s not forget that whatever Tesco giveth, Tesco can taketh away. 

And after all the hype it’s still only around a thousand producers of the 12,500 left in the industry, who will benefit directly from Tesco’s initiative

 That’s why it is important more consumer organisations become involved in this issue and why it is important that the dairy industry works on introducing a new dairy marketing regime that ensures everyone with an interest in the milk chain – including consumers and those who value the countryside and the environment – gets a fair deal.

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