It's in nobody's interests to see local dairy farmers go out of business during the current global slump in milk prices according to local MP David Mundell, who is calling on banks and retailers to support the industry until it comes out of the current over supply cycle, which is forcing farm gate milk prices down and undermining the viability of some local dairy farms. Because of cash flow issues at the First Milk group, some local farmers haven't even been paid at at all.
Mr Mundell said:-
" I have written to Chief Executives of all the major Scottish Banks and retailers asking that they bear with and support local dairy farmers during this very difficult time. There is no benefit in seeing dairy farmers being driven out of business because of short term difficulties due to global oversupply, with the result that when the price recovers we don't have a viable industry left locally or in the UK. We hear a lot about the economic impact the crisis in the oil industry is having on the North East, but a collapse of the dairy industry would have a significant effect locally and that needs to be understood by banks and retailers.
" Like NFUS, I welcome the proposals made by DairyCo to provide a fast track financial advice service to farmers, but it's important that the banks have the right attitude and are willing to look to the long term. Many local dairy farmers have been willing to invest significantly to grow and develop their businesses and they should not be punished now for that forward looking approach by having loans called in or terms changed adversely. Likewise the retailers need to understand the benefits of having a home industry and not simply take undue advantage of cheap imported milk. In the past supermarkets' public statements about backing the industry haven't always been matched by their actions, so this time we need to hold them to account when they say they want to support the industry.
"There have been global slumps before - they are part of an inevitable cycle, but for local dairy farmers to survive this one, we need the industry, banks and retailers to work together and that's what I am calling on them to do."