THE Dairy’s financial problems have baffled a politician who turned the business into profit when he was in charge. Health minister Peter Roffey, one-time president of the former Agriculture and Countryside Board, said he did not understand why the price of milk had not increased over the past few years.

‘I’m not aware of what’s driving the losses, but surely it would have been more sensible to have yearly RPI increases rather than a sudden shock jump?’ he said. ‘I am surprised it has been allowed to get to this point. From the outside, it appears to be a mistake.

‘They said they didn’t do it because the milk situation was under review, but that’s not a reason to not increase the price in line with inflation.

‘I no longer have an inside view, but I find it all a bit peculiar. No doubt the facts will come out eventually.’

Deputy Roffey was in charge of the Dairy until it became the responsibility of Commerce and Employment in 2004.

Under his care, it was transformed from losing money into making a modest profit. He said over-production of milk had been the main reason behind the Dairy losing money back then.

‘Ten million litres were being produced, but only eight million were required and so we had to do something with the excess,’ he said.

‘We made cheese, which we sold on the international market – but we still lost money, albeit slightly less than what we would have otherwise lost, because we were competing with cheese that was made on an industrial scale.’

A quota system was brought in whereby the Dairy paid the full rate only for a limited amount of milk from each farmer. However, that resulted in production going from 20% too much to 0.5% below the requirement.

The embarrassing consequence was having to order milk from Jersey when demand peaked, said Deputy Roffey. ‘There were some drawbacks to our strategy, such as a less attractive deal for farmers, and we also made some unpopular decisions,’ he said.

‘We ceased the production of yogurt, for example, and that was regrettable for many people who enjoyed it, but it was losing us money.

‘We were trying to make the Dairy more efficient as well. For instance, increased hygiene measures means milk doesn’t need as much processing and money can be saved.

‘But modernising working practices involves challenging negotiations and although we were moving in that direction, I am not sure how much progress has been made since.’