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RABDF Call for Processors to Stop Living in the Past
03/08/07

The Royal Association of British Dairy Farmers has called for milk contracts to be less prescriptive and more in touch with the realities of the marketplace.

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The Association believes that farm-gate milk prices are ‘ridiculously low’ and that many contracts on offer to farmers contain unreasonable clauses and unworkable demands.

RABDF chairman Lyndon Edwards commented: “Despite the improvements in world dairy commodity prices, money is not currently being passed back to farmers the way it should be and farm-gate prices remain ridiculously low, perpetuating the situation of constant under recoupment of production costs. There is now no justification for this as far as we are concerned, but unfortunately, due to the lengthy contracts farmers are locked into, they are completely powerless to do anything to help themselves and remain at the mercy of their processor.

“We would like to receive a straight answer from all the processors as to why farm-gate milk prices are not tracking the world market. Arable farmers have a transparent market, so why don’t we? It is not acceptable for processors to use milk contracts as a convenient excuse and simply pocket the benefits for themselves. It is shameful behaviour, especially when they are aware of the chronic financial crisis many dairy farms are faced with.

He adds; “Processors need to stop living in the past. If they continue to stitch farmers into a loss making situation, their only alternatives will be either be to set up their own quota holding groups and have their milk processed on contract or to go out of business, which will result in an even greater supply shortage in the UK.

“Milk contracts should be forged with a sense of realism from both parties. On the one hand, it is unrealistic for farmers to allow themselves to be steam rollered into signing contracts which do not fit their production systems as a result of the climate of fear they are being held in. On the other, many of the contracts on offer from processors and retailers have impracticable, unreasonable demands, and the notice periods farmers’ have to give to get out of them are ridiculously long and do not allow them to take advantage of market opportunities. It is high time processors took their head out the sand and woke up to reality.”

link First Milk Cheese Price Rise an Important Step
link Supply Chain Fails to Heed Warnings Over Milk Supplies
link RABDF Calls for Milk Prices to Reflect Production Costs

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