WITH hundreds of dairy producers going out of business every year, farmers yesterday welcomed an announcement by the Tesco the supermarket giant that it was about to increase the price it pays for milk by some 5p a litre to 22p.

The move comes after massive protests because for several years now, small to medium British farmers have struggled to even break-even at the old price of 17p a litre - and some supermarkets have been importing millions of litres of cheaper milk from France and even Italy.

To the dairy industry, as Tesco would say, "every little helps"

Carole Hodgson - CLA

Carole Hodgson, of the Country Land and Business Association (CLA) commented: "Tesco's intention to raising the price farmers receive to around 22 pence per litre without penalising consumers is a welcome move. To the dairy industry, as Tesco would say, "every little helps" and this could make a big difference to a lot of dairy farmers. I would very much hope that other supermarkets will take note."

"Tesco acknowledged that their customers were not happy with the pressures that dairy farmers were receiving from all sides.

"I am particularly pleased that the supermarket has also announced "localchoice", a new deal that will provide opportunities for those producers in a position to be able to supply locally branded milk to stores to meet the increasing demand for local produce."

The supermarkets, with Tesco as the prime target, have been under attack for years for squeezing their food suppliers into ever lower prices. Only last month, a parliamentary investigation showed that few food producers dare complain because they were frightened of being black-listed and being forced into bankruptcy.

But despite the Tesco announcement, many farmers and growers are deeply cynical, wondering how long the new price structure will last. The supermarkets signed a voluntary arrangement brokered by the Government some four years ago agreeing to pay fair prices - and reneged within a matter of months.

"On another controversial food issue, organic food buffs were dismayed to learn yesterday that the turkey company Bernard Matthews is not to be prosecuted for breaches for food safety regulations following the slaughter of 160,000 turkeys which had contracted the deadly strain of avian 'flu.

During the outbreak, food inspectors claimed that turkey waste had been left in open bins raided by rats and seagulls, raising fears that the 'flu might spread to the wild bird population. Now, the Food Standards Agency has said there "is not enough evidence to justify prosecution."