First Milk chairman Sir Jim Paice to step down

Troubled dairy co-operative First Milk has announced that its chairman, Sir Jim Paice, is to step down.

The news emerged as the company confirmed some farmers would be paid 1p a litre less for milk from July.

Paisley-based First Milk, which is owned by British farmers, last week confirmed a loss of about £22m for 2014-15.

Last month it launched a turnaround plan aimed at reviving the fortunes of the struggling dairy sector.

Sir Jim Paice only took up his role as chairman in October 2013, having been Minister of State at the Department for Environment, Food and Rural Affairs from 2010-2012.

In a statement, Sir Jim Paice said: "As you will be aware from recent milk price announcements around the globe, commodity markets are continuing to decline.

"While the turnaround actions that have been taken over the last two months have improved our trading position, we also have to factor in the impact of lower commodity prices.

"I know this is further disappointing news, which I regret.

"With the turnaround programme now gathering pace and the timescales for an external review agreed, I believe the time is right to announce my intention to step down as chairman of First Milk."

Sir Jim added that he would stay in the role "until a smooth handover to a new chairman is achieved".

The announcement of a further cut in the price dairy farmers would be paid for their milk was described as "deeply disappointing" by Scotland's Rural Affairs Secretary, Richard Lochhead.

Mr Lochhead said it was a further blow to the 350 or so Scottish dairy farmers that supply First Milk.

He added: "Everyone hoped the worst was over and this comes just when a turnaround programme is being put in place by the company.

"It's clear that First Milk's turnaround programme must deliver soon.

"Meanwhile, the Scottish government is committed to doing all we can to help dairy farmers during these volatile times and we are working hard to implement our dairy action plan.

"We will be in urgent touch with First Milk about these further cuts and progress with their wider turnaround plan.

"I look forward to meeting with the new chairman of First Milk when he or she comes into position to discuss the ways in which we can work together to ensure the future of First Milk's members."