Dairy voluntary code of conduct is not end of all milk-producers' woes
You can hunt around for hours looking for a bit of good news about farming these days – but I thought I had come across some the other day when I read of the milk processors starting to sign up to the Dairy Coalition voluntary code of conduct.
This was being put about as though it was the end to all the dairy sector's woes. But of course it isn't. British dairy farmers are as deep in trouble as their continental colleagues – though I wasn't aware of anyone from this side of the Channel scuttling over to Brussels to support them when they sprayed the European Parliament with milk and carried out a spectacular tractor blockade a week or two back.
The only thing – and I will repeat this until I am blue in the face – that is going to get us out of the mire is a price rise. And I don't mean a fraction of a penny there, or maybe a whole penny in a couple of months.
We need the milk price to be hovering around 40p a litre if we are, like any other business, to achieve a decent, reasonable (though not excessive) return on capital invested and labour employed.
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Just repeat that figure to yourself: 40 pence. Now think how unlikely a target it represents given the current climate in the processing industry, code of practice or no code of practice.
This is the scale of shake-up we need to put us somewhere back near the price we should be getting. If you plot a graph of the way costs have risen in the last 20 years, then do the same for the theoretical milk price, it still falls a long way short of where we should be. But I'm not asking for miracles. I'm only suggesting 40p as a reasonable and fair alternative to being paid far, far less in real terms than I was 20 years ago.
That might even help me accommodate the £20 a tonne increase in the concentrate price which has just thrown all our costings out again.
But the real villains of the piece who are acting like a sheet anchor on prices are the accountants employed to cost out milk production on individual farms by the supermarkets, who have been sharp enough to lock gullible dairy farmers into ruinous agreements. These are the people who are claiming milk can be produced for way less than 40ppl and they are the ones who are providing what the supermarkets say is "hard evidence" to show that they are, indeed, treating their suppliers well.
Contrast this with the information provided by independent accountants whose fees are not paid by supermarkets but who work for farmers themselves and it's like comparing chalk and cheese – and speaking of cheese when the stuff is being sold for an eye-watering £10,000 a tonne there is clearly room to pay farmers more.
Derek Mead is an entrepreneur dairy farmer from Weston-super-Mare.
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