By Claire West

As Peter Kendall, President of the National Farmers Union (NFU), called for action on British dairy prices and highlighted the problems in the wider dairy industry, Sainsbury's reinforced its commitment to paying a fair price to its farmers.

Mike Coupe, Group Commercial Director at Sainsbury's said: "For the last five years we've paid a premium to our farmers ensuring they receive a price that gives them a fair return. We saw that British dairy farmers were under huge pressure, with volatile input costs and uncertainty.

"Our farmers have a guaranteed, independently audited contract price. This protects them from the volatility of the market price and takes into account their costs. It ensures SDDG farmers can farm with confidence and stability.

"So whilst prices have been cut by others, we're bucking the trend by increasingthe price paid to our dairy farmers. From 1st July, the standard litre price paid by Sainsbury's increased to 30.56ppl to reflect the increased input costs seen by our farmers.

"Customers expect farmers to be paid a fair price. We know it's in everyone's interests for us to help our farmers invest and ensure our milk is farmed to the highest quality, animal welfare and environmental standards.

"It's an example of how our values make us different and part of our wider commitment to source with integrity, including our pledge to double the amount of British food we sell as part of our20 by 20 Sustainability Plan.

"Over the past five years we've invested £40 million through our industry-leading Dairy Development Group and seen significant advances in animal welfare and environmental standards, in turn saving our dairy farmers over £10 million.

"Our price is paid to our farmers regardless of the processor they use. It is of course a matter for the processor and the other companies they sell to, what price they pay for the other milk they supply."

Mansel Raymond, NFU Dairy Board Chairman continues: "Farm gate costs of production are currently over 30ppl, and rising. With this in mind I'd like to congratulate Sainsbury's, whose cost of production model, which reflects feed, fuel and fertiliser inflation, will be awarding a price increase to farmers from 1 July.

"Dairy farmers need a sustainable future; further price cuts will jeopardise this and be met with real anger."