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Dairy farmers 'being forced out of market'

Britain's dairy farmers are in danger of being squeezed out of business due to overly-competitive supermarkets, it has been claimed.According to the National Farmers' Union (NFU), the country's big four supermarkets are threatening to forever dry up the UK's home-grown milk industry by demanding increasingly low prices.The union's president, Peter Kendall, says that the stance of Tesco, Asda, Sainsbury's and Morrisons is at odds with their supposedly green and sustainable credentials."Whenever I go round the country I am seeing good commercial businesses who are basically hanging their boots up and saying 'I've had enough; I'm moving on; I'm selling the cows and I am getting out'," he told the Today programme."We are already only 90 per cent self sufficient in milk. I do not want us to [lose] what is a great sector for British agriculture. We grow brilliant grass; we have the best herdsmen I believe anywhere in Europe, and if we do not keep that resource in place it will be lost forever."Mr Kendall went on to say that it was dangerous to apply "very simplistic supply and demand economics to the dairy sector.He added: "It's not like manufacturing nuts and bolts where you can turn it on with a switch."What they are doing is abusing a situation where there are a few strong buyers and many weak sellers."But speaking to the same programme, Justin King, chief executive at Sainsbury's, insisted that retailers were merely striving for "competitive" prices in the interest of consumers."Some farmers definitely make no money on milk, but this is a competitive marketplace. The current price for milk is something below 20 pence, probably about 19 pence per litre, and many farmers are able to produce it significantly below that cost," he said."The reality of any competitive market is that some producers are competitive and low in cost, and some producers are uncompetitive and high in cost."Both men will speak at the NFU's annual conference in Birmingham today.

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