An agreement on prices has been reached between French milk producers and dairy firms, based on an annual average price of EUR280 (US$396.29) per 1,000 litres.

The agreement brings an end to several weeks of protests by farmers, who succeeded in disrupting industrial production and distribution.  

Commenting on the agreement, a spokesman for Lactalis told just-food: "I suppose one can say it's a compromise and like all comprises no one is left entirely satisfied. The overriding priority was for an agreement to be found after what has been a long-running dispute.

"That said, French dairy firms are going to be paying around EUR20/1,000 litres more than their counterparts in Germany and the Netherlands, for example. But we've signed up to the agreement and the onus is now on us to increase our competiveness," he added.

Speaking on French radio station, France Info, the president of farmers federation, the FNSEA, Jean-Michel Lemétayer hailed what he called "a courageous" agreement.

"I know that the producers were looking for more but at the same time we saw just how little the dairy firms were willing to concede. What's important is that we now have an agreement which they are obliged to respect." 

The agreement also makes provision for a closer monitoring of milk market trends and the drawing up of a framework that will define future contractual relations between producers and dairy firms from 2010. 

The government will also be initiating a EUR30m relief package this year to help those dairy farmers who are struggling to meet their business costs.