GIVING more money to farmers would see the price of milk fall, not rise, it is claimed. ‘An increase of £0.5m. would enable the retail price of milk to be cut by 6p per litre,’ said Guernsey Farmers’ Association spokesman James Watts. The price will increase by 17p a litre from 1 December.

He said the £2m. subsidy paid annually since 2001 had not been increased which meant it had been devalued in real terms and was now worth about £1.6m.

Commerce and Employment had given no indication that it was prepared to ask for more, yet States members at the April milk law debate had suggested they would have supported such a move, he said.

The department’s plans for reform of the dairy industry in 2005 had been derailed and this was the consequence.

‘The Dairy, as a sinking ship, is just being given a bigger bucket to bail itself out with and the value of milkmen’s rounds has been maintained,’ said Mr Watts.

‘All the while, farmers are developing the breed and maintaining Guernsey’s landscape while being exposed to the threat of imports, which would destroy the industry.’

The whole of the impending price rise will go to the Dairy for the first month, while farmers and milkmen will get their share only from 1 January.

Mr Watts said that had left a bitter taste in farmers’ mouths.

He said that initially he had been delighted when told that the independent price review panel was recommending that farmers would be receiving a 5.7p-per-litre rise.

But when he saw the increases being paid to the Dairy and milkmen, it felt like ‘a kick in the teeth’.

‘What struck me was the sheer magnitude of the rise and the increased threat it could pose from milk imports,’ he said.

He thought the size of the increase on a litre of milk would exceed those in the UK.

Milk production costs in 2006, at 54p per litre, were 2p above income.

This year, costs have risen by 3p due mainly to increases in feed costs, RPI and financing.

From 2008, farmers will also have to pay a further 0.7p for services provided by the department, such as artificial insemination. All that will wipe out the 5.7p a litre rise, he said.