A new report highlights the condition of British dairy farming and calls for a ‘fair trade’ price to be paid to farmers for their milk, after a decade in which they have been forced to sell at a price well below the real cost of production.

The Real Price of Milk was commissioned by the farmer-owned dairy business First Milk and produced by agri-business consultancy Promar International. The report calls for a new formula to calculate a consistently fair price, one that takes account of rising production costs, and allows farmers to make a profit so that they can re-invest in their businesses. It argues that farmers should be paid the equivalent of £0.29/l (€0.38/l).

The report details the rising costs that have been absorbed by dairy farmers in recent years, including animal feed, fertiliser and fuel – all subject to fluctuations in global market conditions. And while those same global conditions led to a series of rises in the price paid to dairy farmers in 2007, those rises were more than cancelled out by spiralling costs.