Argyll & Bute MSP, Michael Russell has described the dairy industry in Kintyre, Bute and Gigha as “in crisis” and has said that “the future of the dairy industry in my constituency hangs on a knife edge. If there is not a significant price rise or significant intervention before the winter sets in, with increased feeding costs, many of those who are presently in the sector will leave it, no matter the cost to them.”


Speaking in a debate on agriculture in the Scottish Parliament he used the example of Cllr Robert Macintyre’s Dunallan farm on Bute to illustrate the severe problems facing dairy farmers and he criticised the dairy co-operative First Milk for their decision to use increased payments from TESCO to the company’s Havordfordwest Creamery solely for the benefit of farmers directly supplying that plant rather than sharing it amongst co-operative members


Commenting on that situation Mr Russell said in the debate:  “When is a co-operative not a co-operative? The answer is when it is run by First Milk.


I appeal to First Milk to rescind that decision to help all its members to survive, not just some. The members of First Milk have much money tied up in the company and they want it to succeed, but if First Milk turns its back on them just when they need it most, it will forfeit all right to respect and continuing support”


Mr Russell also praised the Scottish Government for its help with the refurbishment of the Campbeltown Creamery but called on Cabinet Secretary Richard Lochhead to bring forward urgent new assistance for local dairy farmers and to ensure that European payments, due in December, are paid on time or even earlier than in previous years given the pressure caused by price issues in the sheep and beef sectors, the dairy crisis and the bad weather experienced during the summer.


Mr Russell’s contribution to the debate can be found here:

Official Report

Scottish Parliament Video


Argyll & Bute MSP Michael Russell has written to Richard Lochhead, the Cabinet Secretary for Rural Affairs & the Environment, urging intervention by the Scottish Government and the European Union in the on-going dairy crisis, as First Milk – the only producer purchasing milk in Argyll & Bute – announced a further one pence fall in their “A” price, bringing it to an all time low.

Mr Russell said:

“This further reduction in one stroke negates the concession given only last month by the Scottish Government on the transport of milk from Bute and Gigha.

“Consequently it puts in further jeopardy the future of milk producers in those places and also in Kintyre, for whom the cost of production is now vastly greater than the price they can obtain from the only purchaser of their milk.

“I have had a number of messages from dairy farmers in Bute and Kintyre since the announcement yesterday and most are now actively considering leaving the sector. They simply cannot sustain month on month cuts in price that seem to have no end in sight.

“Losing the dairy sector in Argyll & Bute would be devastating for the local economy and for the overall agricultural health of the area. In the light of that I raised the question of European intervention with Commissioner Hogan last week when he appeared before the Rural Affairs Committee and he indicated that European funds might be available. I also raised the issue at the Rural Affairs Committee this morning and repeated that commitment from Commissioner Hogan.

“I am therefore asking Richard Lochhead to take forward that possibility as quickly as possible and to find any other means he can to deliver real practical and urgent assistance for the dairy farmers of Argyll & Bute, without which I fear there will be virtually no dairy sector left in this area within a few months.”

Meeting with Transport and Islands Minister Derek MacKay MSP and Bute & Gigha dairy farmers today (Monday 18th May) in Rothesay. We made some progress, but it is now essential that the Cabinet Secretary for Rural Affairs and the Environment finds the resources to support reduction in transport costs for Bute & Gigha, for those supplying to First Milk who have reduced the price they pay yet again:

This is the NFUS Press Release after the meeting:

Scottish Minister for Transport and Islands Derek Mackay MSP met with dairy farmers on Bute this afternoon to discuss subsidised ferry transport for milk tankers as a way of assisting beleaguered milk farmers on Bute and Gigha.

Speaking from Rothesay, NFU Scotland Vice President Andrew McCornick said:

“Dairy farmers welcomed the opportunity to meet with the Minister for Transport and Islands, Derek Mackay MSP, in order to discuss the increasingly difficult situation for dairy producers in Bute and Gigha and the significant difference that subsidised ferry transport for milk tankers might make to the future of the dairy industry on these islands.

“We welcome Mr Mackay’s support in principle for putting temporary measures in place to provide half of the cost of ferry fares for First Milk tankers until the planned review period in September.

“However, it is clear that the stumbling block will be finding the required funding in order to bridge this gap, believed to be in the region of £35,000. NFUS will therefore continue discussions with Mr Mackay and the Cabinet Secretary for Rural Affairs Richard Lochhead in the hope of securing this vital funding to part-remedy the increasingly desperate situation for dairy producers in Bute and Gigha.

“There will be ongoing frustration amongst milk producers on these islands that this matter remains unresolved and our dialogue with Ministers will start again tomorrow with renewed vigour.”

Russell asks for Chair and CEO to explain further price reductions and penalisation of Bute suppliers

The Scottish Parliament Rural Affairs Committee has agreed to recall senior figures from First Milk to question them about the company’s “Turnaround” plan revealed last Friday which further reduces the amount paid to Scottish dairy farmer members of the co-operative and introduces a punitive additional one penny a litre cut for Bute producers because of transportation costs.

Michael Russell, the MSP for Argyll & Bute and a member of the committee requested the recall at a meeting of the Committee this morning and members agreed to include it at an early date in their forward work programme. The invitation is likely to be issued by committee clerks today and it is hoped that the Chair and CEO of the company will agree to appear before the committee within a fortnight.

Commenting on the decision Mr Russell said:

“There is huge anger on Bute at the decision of their own co-operative to penalise the dairy farmers of that island with an additional one penny per litre price cut over and above the 0.2 cut being imposed across Scotland, but not in some other areas of the UK. Members of the rural affairs committee were unanimous in their view that this new development necessitated a recall of First Milk, who gave evidence to the Committee’s dairy inquiry on 28th January, given that the price being paid before this latest cut was still well below the cost of production. In addition the committee has previously called for assistance with transportation costs for Bute dairy farmers and the “turnaround” plan seems to cynically take advantage of any concession that might still be made.

“I believe the Chair and CEO of First Milk have a great deal of explaining to do and the Scottish Parliament Rural Affairs Committee is keen to hear from them as soon as possible. Such a public session will also allow the Bute dairy farmers themselves to hear at first hand why the company has behaved in this destructive and damaging way.”


The MSP for Argyll & Bute Michael Russell has reacted angrily to today’s announcement by First Milk that it is further reducing the price it pays to its dairy farmer members in Scotland, with an additional cut for Bute farmers because of transportation costs. He has confirmed that he has already spoken to the company, as well as to Richard Lochhead, the Cabinet Secretary for Rural Affairs and the Environment, about the issue.

Commenting on the price reduction, Mr Russell said:

“I was horrified to be notified this morning by farmers that a further cut to the price they receive was going to be announced today. First Milk claim their “turnaround” plan requires them to take 0.2p more off the price of a litre supplied by Scottish farmers, though no such reduction is to apply to Welsh farmers.

“As the price paid is already below the cost of production, this is a further serious blow to Kintyre. However, to add insult to injury, the price being paid by the company to dairy farmers on Bute will fall by 1.2p from the 1st of June, with the company citing increased freight costs as being the reason.

“In reality, this is a cynical attempt by First Milk to blackmail the Scottish Government into further transport subsidies, with the benefit going not to farmers, but to the company. It is also a cruel betrayal of the Bute farmers who have supported their own co-operative over many years.

“There is tremendous anger today on Bute and further afield. I spoke to the company this morning and told them that I regarded their actions as absolutely unacceptable, and have also had a telephone conversation with Cabinet Secretary Richard Lochhead, who was as horrified as I was.

“I am taking a delegation of Bute farmers to see the Transport Minister on the 12th of May , which is the same day as Richard Lochhead is due to meet First Milk. There will be an unequivocal message from all of us to the company on that day – reverse these appalling decisions , and apologise for them.

“I will also press the Government hard for immediate help with transport costs though we need to find a way to ensure that the money does not go into the pocket of First Milk but instead into the dairy farms on Bute.”


Speaking after a meeting of dairy farmers and their families, held in Campbeltown last night, which considered the recent report from the Scottish Parliament’s Rural Affairs Committee, but was held in the shadow of a further reduction in the price per litre paid by First Milk, effective from April, Argyll & Bute MSP Michael Russell commented:

“This was a well-attended and very focussed meeting, which discussed in detail the challenges facing the dairy industry in Kintyre. There was agreement that the absolute priority was to ensure that First Milk honoured their commitment to major investment in the creamery, which is being supported by grants from the Scottish Government. I agreed to meet the dairy farmers and their families again soon, when there will hopefully be more information from the company about a firm timescale of the upgrading of the creamery, which is vital for the future of the producers and the area.

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Argyll & Bute MSP Michael Russell has raised the plight of local dairy farmers in the Scottish Parliament and obtained a commitment from Cabinet Secretary for Rural Affairs, Richard Lochhead, to meet with them and to intervene with the banks to seek support for the local dairy industry.


Mr Russell was also very critical of First Milk, which has cut the price per litre to its 51 suppliers in Argyll and Bute by 12.5 pence a litre since June.  On the 1st of February 2015, those under contract to First Milk will be receiving five and a half pence per litre less than the next lowest price from a milk company, and seven pence less than the very lowest cost of production.

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Argyll & Bute MSP Michael Russell has secured a Topical Question in the Scottish Parliament tomorrow (Tuesday) about the First Milk crisis which is affecting over 50 dairy farmers in the Argyll & Bute Constituency.

Mr Russell will ask the Scottish Government “what action it is taking to assist dairy farmers contracted to First Milk who have been notified over the weekend of a further reduction in price and the postponement of payments due?”

Mr Russell said: “I have been contacted by a number of dairy farmers over the past few months who are in grave difficulty but developments in the last few days have made their situation even worse.

There is an overall problem in the dairy industry with an over supply of milk internationally but for First Milk contracted supplier things are even worse The price they are getting has fallen by 14 pence per litre since the 1st June which has resulted in over £6 million coming out of the Argyll & Bute rural economy. This loss is clearly not sustainable and if the situation is not rectified then dairy farming in Bute and Kintyre where 51 farmers have First Milk contracts will be a thing of the past.

I know that Richard Lochhead is very concerned about the problem but this weekend’s developments including todays postponement of payments due for a further fortnight have created a full blown crisis and those contracted to First Milk need help as a matter of urgency.”