Protest group Farmers for Action (FFA) has proposed an alternative milk pricing formula that it claims could bring control and “price stability” back to the industry.
It was published this week, hours after Müller and dairy Crest joined Arla and Tesco in announcing more dairy price cuts. These prompted renewed calls for direct action from the FFA, with chairman David Handley urging members to “leave a free date in your calendar for the next 10 days.”
He said the FFA’s formula proposals deserved a “full and open consultation that would allow the British dairy industry to go forward as a complete supply chain.”
The FFA proposes an ‘A price’ - a standard litre price paid by the processor based on the production of each producer at the end of the 2014/15 milk year - and a ‘B price’ triggered if producers exceed the base year’s production by more than 5% without the processor’s consent.
Handley said the ‘B price’ would be based on returns received by the processor from the open market and “could be considerably higher or lower than the standard litre price”.
The formula would promote “self-control” by farmers on supply, added Handley, but would not hinder entrepreneurial farmers. He claimed it would also remove “supply and demand issues” affecting the industry.
Industry consultant Hamish Renton described the formula as “interesting and thoughtful,” but warned it could “see the UK miss out on a huge amount of post-quota growth in export markets.”