THE threat of milk imports has diminished due to changes in the global dairy industry, according to local farmers. Guernsey Farmers’ Association spokesman James Watts said milk prices were rising so fast elsewhere that an on-island increase would only maintain the differential.

‘Groundbreaking things are happening to the dairy market at both national and global levels because of milk shortages and prices are rocketing,’ he said.

The States agreed at its April meeting to the setting up of an independent Milk Price Review Panel.

The panel announced this week that it hoped to make its first price recommendation to the Commerce and Employment Department by 5 October.

Farmers want an extra 6p per litre because they say the current rate has not kept pace with inflation.

‘We hope that the panel and the board ‘Commerce and Employment’ will realise that there is not the pressure to keep the shelf price down in Guernsey that there was even two months ago,’ said Mr Watts.

He said the Chinese were now developing a taste for dairy products and many UK farmers had reached breaking point due to poor returns and were giving up.

Production nationally has dropped 5% in the last year and people are having to pay more for the product.

‘The price on the shelf might not move immediately, but the supermarkets will not take that cut in profit margin for long and it’s inevitable that the price will rise,’ said Mr Watts.

The retail price of milk in Guernsey is currently set at 70p. A proposal to increase it to 75p earlier this year was scrapped to enable the panel to make any decision.

Farmers currently get paid 52p per litre. That comprises 27p from Commerce and Employment as the Dairy operator and a further 25p from the Treasury, part of a £2m. environmental payment made annually to farmers.

There has been no increase for three years.

Mr Watts said the panel’s first decision could not come soon enough for farmers. He looked forward to meeting the panel as farmers are one of the three stakeholders, along with the Dairy and milkmen.

‘The threat of imports of milk will not be increased by a huge local price rise because UK prices are also rising very similarly,’ said Mr Watts.