Yet another price cut for Bute dairy farmers

First Milk is to impose a further 1p cut in the price it pays Bute's dairy farmers.
First Milk is to impose a further 1p cut in the price it pays Bute's dairy farmers.

Bute’s under-pressure dairy farmers are set to be hit by yet another cut in the price they receive for their milk.

First Milk, the co-operative of which they are all members, has anounced a further fall of one pence per litre in their ‘A’ price - paid to farmers for 80 per cent of their milk production levels.

The latest reduction will take effect from Wednesday, July 1.

The news - accompanied by an announcement that the company’s chairman, Sir Jim Paice MP, is to resign - has prompted Argyll and Bute MSP Michael Russell to urge intervention by the Scottish Government and the European Union in the ongoing crisis.

Mr Russell said he feared that without outside help, there could be virtually no dairy sector left in the area in a few months’ time.

“This further reduction in one stroke negates the concession given only last month by the Scottish Government on the transport of milk from Bute and Gigha,” Mr Russell said.

“Consequently it puts in further jeopardy the future of milk producers in those places and also in Kintyre for whom the cost of production is now vastly greater than the price they can obtain from the only purchaser of their milk.

“I have had a number of messages from dairy farmers in Bute and Kintyre since the announcement yesterday and most are now actively considering leaving the sector. They simply cannot sustain month on month cuts in price that seem to have no end in sight.

“Losing the dairy sector in Argyll & Bute would be devastating for the local economy and for the overall agricultural health of the area.

“In the light of that I raised the question of European intervention with Commissioner Hogan last week when he appeared before the Rural Affairs Committee and he indicated that European funds might be available.

“I also raised the issue at the Rural Affairs Committee this morning and repeated that commitment from Commissioner Hogan.

“I am therefore asking Richard Lochhead to take forward that possibility as quickly as possible and to find any other means he can to deliver real practical and urgent assistance for the dairy farmers of Argyll and Bute, without which I fear there will be virtually no dairy sector left in this area within a few months.”

Sir Jim Paice said: “With the turnaround programme now gathering pace and the timescales for an external review agreed, I believe the time is right to announce my intention to step down as chairman of First Milk.

“In my letter last week I said that I believe the board needs more people with real commercial and business skills. That means I think there has to be significant change in the constitution of the board, and that includes the chairman role.

“Signalling my intention to stand down allows the board to immediately start work on scoping out the personal and professional qualities that they require in a new chairman, and initiating a recruitment process.

“In order to ensure an appropriate transition, I will stay in role until a smooth handover to a new chairman is achieved.”

Last week First Milk announced pre-tax losses of approximately £22 million for the 2014-15 financial year.