UK retailer Morrisons has confirmed it is “looking at” the premium that it pays to dairy farmers in its dedicated milk pool.

The company pays UK dairy farmers a premium of one pence pre litre for milk supplied. However, this means its farmers are being paid less than the cost of production.

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Dairy farmers have stepped up pressure for retailers to increase the payments they make for milk after a swathe of farm-gate price cuts left them in a “severe loss-making situation”.

“We are looking at other ways of making payments,” a spokesperson for Morrisons revealed.

However, the spokesperson played down reports it is preparing to switch to payment model related to the cost of production – as is already operated by rivals Tesco and Sainsbury’s. 

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