Memorandum submitted by James Turnock
(DFoB 41)
My name is James Turnock, I am a dairy farmer
at Cantop Farm, Condover, near Shrewsbury. I have been asked by
the office of my MP Daniel Kawczynski to state how the collapse
of Dairy Farmers of Britain has affected my business.
I farm in partnership with my wife Gillian milking
around 300 cows. Our business was founded in 1994 milking around
65 cows and has steadily expanded to a target of 400 cows by autumn
2010. Obviously we have invested very heavily in our business
to achieve a viable operation. We joined Dairy Farmers of Britain
via The Milk Group on its merger with Zenith, as we believed being
part of a farmers co-operative would provide some control over
our own destiny.
We would like to list some of the points we
feel relevant.
1. From the outset the milk price we were
receiving was always at the lower end in comparison to other milk
buyers which led to a constant decline in membership as producers
sought better contracts with other buyers. At the same time overheads
within DFOB remained high as the volume of milk handled decreased.
2. Whenever challenged as to when we could
expect better returns we were always told in the next 12 months—it
never happened.
3. There became an increasing desperation
to get involved in processing, which led to members capital retention
to fund any acquisition. We were against this as we were on a
very low milk price and were investing heavily in our own business,
but we had no choice in the matter.
4. The purchase of the Co-op Dairies was
something we were not in favour of as most dairy industry commentators
had believed the plant and equipment was outdated and inefficient
and was greatly over priced. Again we had no option but to go
along with the decisions.
5. We became increasingly concerned about
the annual accounts and also the large salaries being paid. When
these concerns were expressed we were repeatedly told the business
was in good shape and the management were doing a good job. We
were virtually told to mind our own business. Do not forget this
was supposed to be our own business!
6. In May 2007 we decided DFOB was in very
bad shape despite the claims otherwise from management and handed
in our resignation, with 12 months notice required. We left on
31 May 2008.
We have lost £75,723.00 from the capital
retention, which to a small family business as ours is a lot of
money. This money was extremely hard earned and has been squandered
and lost by poor management and bad decisions. We appreciate that
we will not see any of this again (something we anticipated as
far back as 2006). However, this money was included in business
profits and thus we have paid the relevant income tax on it. Therefore,
we feel very strongly that at the very least we should be allowed
to set this loss against profits in the future.
James Turnock
December 2009
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