Raw Milk Talks Break Down

SOUTH KOREA - Dairy farmers and milk companies failed to find middle ground on a hike in raw milk prices on Friday but farmers lifted a ban on shipments, averting a crippling supply shortage.

12 August 2011

2 minute read

Asia

According to Yonhap News Agency, the Korea Dairy and Beef Farmers Association said three days of talks failed to iron out differences on raising raw milk costs, confirming that its members rejected the hikes being offered by dairy companies.

"An emergency meeting of dairy farmers will be held to determine what actions will be taken down the road," it said.

Dairy farmers initially demanded raising raw milk prices by 173 won (US$0.16) per liter but said they could accept a raise of 145 won. Dairy companies said they are willing to raise their purchase price by a maximum 130 won from the original 81 won increase they put on the negotiation table.

The average price for a liter of raw milk, which has to be processed to become the milk people drink, stands at 704 won. This price has remained unchanged since 2008.

"The two sides have not been able to bridge the 15 won gap despite government mediation," an association executive said. He added that dairy farmers and dairy companies were also at odds over when to implement the hikes.

Farmers are demanding that prices should be adjusted starting next Tuesday, while dairy companies called for prices be raised starting on the first of January.

The association that represents the interest of the country's 4,000 dairy farms that together raise over 400,000 heads of cattle, however, said that there will be no halt in the production of milk because farmers have been allowed to sell milk to dairy companies for the time being.

Meanwhile, farmers said they will not accept a possible compromise that could be made by the public Korea Dairy Committee, which has the authority to broker a settlement.

The dairy committee has been given the authority by the farm ministry to set the price increase if negotiations between farmers and dairy companies fall through.

"We may use force to prevent the committee from gathering," the association said. It also said getting paid a fair price for raw milk is necessary to prevent unfair practices by milk companies.