THE results of the Milk Development Council investigation into milk pricing have shown that the most practical and useful solution to the pricing issue is unlikely to be a formula.

Instead, the research proposes the introduction of a system to provide better information for those negotiating fair milk prices for farmers.

Although pricing formulas and formal milk price indexation were investigated, their use was ruled out, given the UK's strict competition authorities which have, in the past, made it clear that UK farmers cannot expect special treatment on the issue.

A range of other milk pricing systems across the world, ranging from statutory formulae to private contracts, were also investigated. In order to establish a milk price that represents and reflects true market conditions, the report points to the need for access to accurate and comprehensive market information.

This is intended to overcome the all too common position where prices fall more quickly than they rise, because of poor or inaccurate market information.

The report recommended establishing a method of making it easier to collect institutional prices, commodity dairy product prices and yields, producer prices and information on costs and profits.

It also proposes an increase in the use of auctions as well as an investigation of internet milk trading and futures markets to find the real market price of milk for comparison with other systems