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TESCO: PAY FAIR PRICE FOR MILK |
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Thank your for the coverage of the campaign by the Green Party and FARM, the independent voice of farmers, to persuade Tesco to pay a fair price for it's milk (8/10/04). An average of 40 dairy farms a week are going out of business(i) including an expected 3 or 4 in Gloucestershire in the very near future. This is a tragedy for each family farm concerned. But the trend towards fewer, more intensive dairy units is also harming rural communities, animal welfare and wildlife.
The SNJ article quotes a Tesco spokesperson justifying their position by saying they "are one step removed" as they "buy ready-to-drink milk not the raw material from the farmers." However the Milk Development Council states, that in the last decade, supermarket margins have improved by eight to ten pence per litre, but farmgate prices have fallen by around six pence per litre (ii).
If Tesco was paying its workers £2.90 an hour it would be a national scandal. The fact that Britainâ€â&dbquo;¢s dairy farmers earn on average £2.90 an hour, and are paid less for their milk than they were 20 years ago should warrant a similar response(iii).
It is disturbing that the government's response is to say "it has no view" on the number of dairy farmers it thinks the country needs(iv). Yet the dairy industries steep decline is bound to also impact negatively on local rural employment and related industries, like the billion-pound food manufacturing industry.
A healthy, sustainable dairy industry depends on a fair price for farm-gate milk and a large and diversity number of dairy farmers. We would urge all your readers to write to Tesco saying we want dairy farmers to receive a fair share of retail price.
Julia Currie, FARM
Philip Booth, Gloucestershire Green Party
Lark Rise, 2 The Laurels, Bread Street, Ruscombe, Stroud, Glos. GL6 6EL
Notes to editors
(i) Since 2000, some 6,300 dairy herds have disappeared and as the milk crisis deepens, it's being predicted that a further one in three dairy farmers will soon go out of business.
(ii) Tesco is the embodiment of everything that is unfair in the milk chain. As the largest retailer, Tesco represents the huge influence that retail power is having on dairy farmer incomes. Of course, Tesco are by no means the only culprits in this crisis – nor are they necessarily the worst actors in the milk chain. But as the market leader, they have an unrivalled responsibility and ability to help British dairy farmers. In 2003, the retailersâ€â&dbquo;¢ margin on liquid milk was 12.92 p/l [from MDC Datum figures]. The reply from Tesco claims that ‘the dairy companies sell us milk for about 3p less than the price we sell it at. Those few pennies must stretch to cover all of our store and staff costs etc.â€â&dbquo;¢ However, because most liquid milk is delivered straight to the store, unlike other groceries, which are delivered to regional distribution centres, costs are lower on liquid milk than on other groceries. “Sadly Tesco have not responded to the request to publish their figures. Over the past decade, farmgate prices and farm margins have fallen, dairy processor margins have remained fairy constant, while retailer margins have increased across all products. [MDCDatum Dairy supply chain margins report 2003/04] In 1998, there were 36,700 dairy producers in the UK; in 2003 there were 26,000. Thatâ€â&dbquo;¢s just over 10,000 lost over just five years, c.40 a week [from www.mdcdatum.org.uk ]
(iii) According to a Parliamentary Select Committee report, for the past seven years the average earnings of a dairy farmer has been just £2.90 an hour.
(iv) In a meeting of the Committee of Public Accounts concerning ‘Helping farm businesses in Englandâ€â&dbquo;¢ (13 October 2004), Sir Brian Bender, permanent secretary at DEFRA said the following "...the Government has no view about the number of dairy farmers, the number of beef farmers and so on. The Government has a view that it wishes to have sustainability, a sustainable farming industry, and it wishes to have vibrant rural communities, but the number of farmers in a particular sector is not an issue the Government has a view on."
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