Shropshire Council leader wades into milk cash row warning impacts could be devastating for farmers

Councillor Barrow will contact Sir Jim Paice, chairman of First Milk, which announced last week it is delaying its next milk payment by two weeks as it attempts to put its finances in order.

It comes as campaign group Farmers For Action tonight holds the latest in a series of protests over falling milk prices. First Milk was understood to have been losing 1p on every litre of milk it processed.

It now hopes to raise £10 million by deferring one of its main costs.

Sir Jim said the move, which affects a number of Shropshire producers who supply to the farmer-owned co-operative, was a necessary step to put the company's finances on a more solid footing ahead of the spring.

But Councillor Barrow fears the move could have a "devastating impact" on farmers. "Shropshire Council has important and strong links with the farming industry and rural community in the county," he said.

He added: "We have been extremely concerned to learn of the pressure which has now been placed on dairy farmers who are members of First Milk, as a consequence of deferring their payments for supplies of milk and reducing their net payments through capital contributions and price cuts.

"The feedback we have had from farmers is that these policy changes within First Milk will have a devastating impact on farmers' cash flow and the future sustainability of their business.

"We recognise that these actions are a consequence of extreme volatility on the global dairy market and we will be speaking to stakeholders in the county, such as agricultural suppliers and banks, to encourage an understanding and sympathetic approach to transactions with farmers impacted by market volatility and the actions of First Milk."

Dairy is vitally important to the Shropshire economy and Shropshire Council will be looking for all opportunities to assist farmers, by developing the dairy industry. I will be writing to Sir Jim Paice to make him aware of these very serious concerns."

Meanwhile, members of FFA are due to hold a meeting at Bakewell Livestock Market, Derbyshire, tonight from 8pm.

FFA has been taking part in a series of protests around the country over the last couple of months after dairy processors, including Market Drayton-based Muller Wiseman, slashed the price they pay farmers for milk.

But some farmers did receive a boost this month after the firm announced the price it will pay farmers for milk from February will remain at 25.90p per litre (ppl).

FFA member Paul Rowbottom said: "It will be interesting to see how many farmers will turn up. There is no indication the price will go back up.

"It is down to farmers, but if they wish to do so then we will carry on protesting."