TALKING POINT
Farmers Weekly
January 2-8, 2004, p. 58

Among all the doom and gloom of dairying, there is a future in milk production if we reorganise with a sensible modern marketing structure, says Mike Haskew, Farmer's for Action vice chairman and milk negotiator.

Together with wife Sue, Mike operates a tenant dairy farm which runs 90 cows plus followers on 48ha (120 acres) at Ross-on-Wye, South Herefordshire.

THERE'S NO future in dairying. Let's grab our entitlements from the mid-term review, quit production and live off our new pension.

That will be the view of many dairy producers at the beginning of this New Year. One cannot blame them. Poor returns (if any), the need to invest in buildings, plant and machinery, finding sufficient skilled labour, making a decent living and enjoying home life are all becoming more difficult.

But what about farmers, like me, who are committed to milk production? The first thing to realise is not to push for more production. The need for farmers to exercise control in the market is paramount and to do that we must control output.

Wanting both to produce more milk, to flood the market, and a price rise is nonsense.

There is a future in dairy farming provided we reorganise ourselves with a modem marketing structure. That's particularly important after the midterm review as the market will still be where we derive our main income.

We owe it to the younger generation of dairy farmers to get our own house in order. Setting up a professional marketing agency is the way to go.

We want a milk agency; an evolving business that would put common sense and professionalism into selling raw milk off dairy farms. It should be run by a team of the best corporate marketeers selling a large percentage of UK milk, 60-70%, under one umbrella.

With sensible co-ordinated marketing, farmers will get a higher percentage of the final selling price to consumers.

Margin and profitability will be reinstated back to the primary producer. Dairy farmers need to make a profit to reflect the skill and expertise that they put into their business and also for capital reinvestment.

The milk price should reflect the importance of liquid milk to retailers as a magnet to attract consumers into their stores regularly to buy high profit margin goods.

A good starting point would be a small group of forward-looking individuals who do not accept the words, "cannot be done". They should meet the Milk Development Council, Farmers for Action, the main farming unions and Office of Fair Trading and not leave until a formula for the agency is agreed.

The milk groups themselves, such as the brokering co-ops and direct selling groups, would remain autonomous but commit 100% of their milk to the agency. And every group of producers supplying the agency would receive the same milk price for their members.

We would need to appoint a leader and a team of five or six to form the selling team in the agency. The team in the agency would be paid a fair salary reflecting their track record. Generous bonuses could be earned reflecting how much dairy farmers' milk price per litre rose above the market.

This agency's brief would be to sell all farmers' milk to the best advantage and to give farmers a better return. They would need to communicate with the Office of Fair Trading to resolve any complaints.

The overall aim would be to co-ordinate marketing of milk so that one dairy farmer did not compete with a fellow producer to sell milk at the cheapest level. The team's role would also include a brief to look at what opportunities there are in world markets for dairy farmers and their products.

As regards milk transport, the agency selling team would go to a milk processor and agree a milk price and quantity. All the nearest milk to that plant, regardless of who produced it, would be delivered to it.

Let's be honest: The marketing of milk off our farms is not working.

Farmers are the weakest link in the chain. If the British farming establishment refuses to change with the times, we dairy farmers will remain the poorest paid individuals in the European dairy industry.