Immediate government action is needed to sustain dairy production on Bute, the Scottish Parliament was told this week.
In a debate on the dairy industry held at Holyrood on Tuesday, Richard Lochhead, the Scottish Government’s cabinet secretary for rural affairs, promised that a review of ferry fares for freight, currently being carried out, would pay close heed to the problems faced by the island’s dairy sector.
Mr Lochhead also said his cabinet colleague, transport and islands minister Derek Mackay, was keen to meet dairy farmers from both Bute and Kintyre to hear first-hand of the difficulties they face - difficulties largely caused by the decisions of First Milk, the dairy co-operative of which they are all members, to repeatedly cut the price it pays to its farmers for their milk.
Argyll and Bute MSP Michael Russell, speaking in Tuesday’s debate, said: “It is imperative that action is taken now to sustain dairy production in Bute and Kintyre, and ensure the long-term sustainability of the Campbeltown creamery. The investment package for Campbeltown creamery of £450,000, confirmed by the Cabinet Secretary in today’s debate, is of great importance and needs to be spent on the creamery as quickly as possible.
“The Scottish Government must also introduce the ferry concession requested by Bute dairy farmers, and backed by NFUS. All these things need to happen sooner, rather than later.
“Time is not on the side of those who are receiving a payment per litre that is almost 10p below the actual cost of production. Whilst that is likely to change if the world price rises later this year, as is predicted, there also needs to be substantive structural change in the dairy sector in Scotland, if a long-term future is to be guaranteed.”
Conservative Highlands and Islands MSP Jamie McGrigor told the debate: “We have heard today of the very severe challenges facing those dairy farmers contracted to First Milk and these include my dairy farming constituents in Kintyre, Gigha and Bute, fragile rural communities where the dairy sector is critical to the local economy.
“Milk costs farmers around 30ppl to produce but some First Milk suppliers are receiving 18ppl or less, meaning massive - and unsustainable - financial losses for many farm businesses. I would wish to commend the positive actions of Mount Stuart Estate on Bute in relation to their dairy tenants.
“The financial pressures facing First Milk itself are well known and all of us want to see First Milk back on a sound financial footing and this must be the immediate priority. We recognise that the Scottish Government has said it is committed to helping support First Milk transform its operation in Scotland and we welcome this.
The Dairy Action Plan suggests the government will provide support for First Milk’s revised capital investment plan in Campbeltown and I want to emphasise how crucial this is. The Campbeltown Creamery is a critically important processing facility but investment is needed in new boilers and increased capacity. I therefore welcome what the Cabinet Secretary said today of the imminent approval of grant support of around £450,000.00 for the creamery with the first instalment of that grant to be paid within weeks and I look forward to this being delivered as soon as possible.
“Other members and the Rural Affairs Committee inquiry have also raised the issue of the high commercial vehicle ferry fare costs to uplift milk from the dairy farms on islands, amounting to some £120,000 for Bute and £29,000 for Gigha. I agree with local dairy farmers that the Scottish Government should intervene on this matter without delay and provide these dairy farmers with practical and immediate support, certainly before the October target set in the Dairy Plan.”