THE Commerce and Employment Department meets today to discuss what is expected to be a six-figure loss at the Dairy in 2006. Dairy management board member Deputy Duncan Staples confirmed a loss yesterday but said he would not reveal the figure until after the meeting.
The Dairy made an operating loss of £71,730 in 2005 compared to a £1,721 profit the year before.
The operation expects to lose £173,000 this year.
Farmers are angry that more than half of a proposed 5p-per-litre increase in the price of milk is expected to go to the Dairy.
‘If you break it into a proportion of what each sector does, it’s very unfair - the Dairy will be getting too big a share,’ said Guernsey Farmers’ Association spokesman James Watts.
‘The explanation that we’ve been given is that the main reason for the loss is that it is fuel and wage costs, which is something we’ve had to deal with, too.’
In its proposals for the future of the island’s dairy industry, Commerce and Employment acknowledges that the need for an increase in the price of milk from 70p to 75p a litre has become acute.
It wants that rise to take effect on 1 May, before a Milk Price Review Panel, also part of the proposals, is set up.
Without a price rise, the department said it would have to borrow money from the Treasury by July to ensure that cashflow at the Dairy was maintained.
It said the rise would be shared appropriately between the farmers, the milkmen and the Dairy.
Mr Watts said the indications were that about 3p would go to the Dairy with about 1p for farmers.
The amount paid to them for milk has not changed for three years and the most recent increase given to milkmen was in 2003.
The contract payment of £2.025m., introduced for farmers in 2001, has also not increased. Mr Watts said he was grateful to Commerce and Employment for the continuing faith it showed in the dairy industry by declaring its intention to ask the States to maintain the payment.
‘The price of milk covers about half of our income and the other part comes from the contract payment,’ he said. ‘It’s been a bit of a sword hanging over our heads but we are encouraged that they’ll be asking for it again.’
Article posted on 17th April, 2007 - 12.00am
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