Milk buyers are 'taking advantage' of producers

MILK buyers are attempting to take advantage of farmers hit by last week's collapse of Dairy Farmers of Britain (DFB), according to the NFU.

NFU regional director Richard Ellison

MILK buyers are attempting to take advantage of farmers hit by last week's collapse of Dairy Farmers of Britain (DFB), according to the NFU.

The co-operative, which has 500 jobs dependant on its site in Blaydon, went into receivership because of falling prices and the loss of its Co-op contract, which accounted for half of its work.

NFU representatives, including regional director Richard Ellison, met with receivers PricewaterhouseCoopers (PwC) yesterday to discuss the future of dairy farmers who supplied DFB.

NFU Dairy Board chairman Gwyn Jones said: “I am receiving a growing number of reports that some buyers are taking advantage of farmers in vulnerable positions and offering shamefully low milk prices.

“I will be investigating this matter further and any buyer that is proved to be profiteering and exploiting farmers will be exposed.”

The NFU arranged the meeting to discuss a number of technical and legal questions about why things had gone wrong.

“It was crucial that we met with PwC and DFB at the earliest opportunity. We had a long list of questions, some of which will have to wait to be answered – including how did we get here? Where has the money gone? And why did things go so wrong?” said Mr Jones.

“I was reassured to hear that all milk has been collected so far. However, I remain extremely concerned that some farmers with small volumes or in remote locations could end up with no buyer for their milk. The NFU is working very hard to ensure that as many farmers as possible are able to find suitable homes for their milk.”

The NFU’s Deputy President Meurig Raymond has written to the major banks working with the agricultural sector to help those farmers affected by the problems at DFB.

He said: “The immediate situation is characterised by uncertainty, instability and, for many, significant short term cash flow implications. I am keen to learn what arrangements the banks are likely to put in place to assist those affected.”

Barclays Bank said it was contacting affected customers to offer reassurance and a financial support package. This includes the option of a repayment holiday on loans and appropriate extension of overdraft facilities.

Tim Seeley, Barclays’ head of agriculture, said: “We appreciate that this will be a worrying time for those supplying Dairy Farmers of Britain. We are currently speaking to all affected customers to reassure them that we will do our utmost to provide them with the tangible support they need to help to keep them in business.

“Farmers have had to write off all milk delivered from May 1 until this week which will affect cash flow and profit significantly.

“However it is reassuring to hear that the DFOB will continue to trade and farmers can now expect payment for milk collected after 3.00pm on June 3.

“Milk production in the UK is at historically low levels and most processors are keen to secure additional supplies. It is likely, therefore, that, if it does become necessary, most farmers will be able to find an alternative buyer for their milk.”

Some buyers are taking advantage of farmers in vulnerable positions and offering shamefully low milk prices.

 
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