YORKSHIRE dairy farmers were urged to join a national campaign aimed at creating a farmer-owned business which would sell at least a quarter of all British milk.

Nearly 300 farmers attended an open meeting in Harrogate, organised by the Yorkshire Holstein Club, to hear Mr John Loftus, chairman of the Milk Producers' Federation, outline the way ahead for the dairy industry.

He described the newly-formed federation as a "think tank" designed to draw up a blueprint to take producers into the next century.

"Farmers have been brought up in the Milk Marketing Board world where all they do is produce milk and someone else picks it up and completes the job," he said. "But that world has changed. We now live in the world of big business where supermarkets deal with large processers."

Farmers must ensure they had a sizeable stake in milk processing. "We need to be in a farmer-owned business that has at least 25pc of British milk," he said.

During the Milk Marque era, producers could not buy processing and could only increase income by buying quota.

"We spent £500m to £700m a year competing with each other to buy quota and supporting sofa farmers," said Mr Loftus. "This money could have bought the whole processing industry twice in five years."

Quotas were due to be phased out in 2008 and it was important farmers' contracts were with a business in which they had substantial shares.

Predictions showed that, in ten years' time, there would be just three supermarket chains in the whole of Europe and it was likely the number of processors would be whittled down accordingly.

Mr Loftus urged Yorkshire producers to join the federation's one-year campaign and form regional and local groups which would negotiate with existing co-operatives.

"We are trying to get everyone involved; this is a whole industry campaign," he said. "We have the banks backing us at regional level; we have the semen companies behind us and we are getting a lot of industry backing. This involves not only producers but feed companies, vets, milk recorders and others associated with the industry."

Regional support from the NFU had been forthcoming and talks were to be held with the national organisation in London shortly.

Open meetings such as the one at Harrogate on Monday evening were being held across the country and, of the 7,000 farmers who had attended so far, only one voted had against the campaign.

"If we can get 10,000 farmers with 60 cows apiece, we can get the milk we need," said Mr Loftus. "If I go to 50 meetings in the country and get 20 active people, who each get another ten farmers to sign up, we have our 10,000."

Each farmer who signed up was asked to make a one-off payment of at least 50p a cow to help fund the project.

The first regional group had been set up in Scotland and was due to report back to a national federation committee. By the end of this week, a campaign video and brochure would be available and by October it was hoped groups would be working actively across the UK.

Co-operatives should be ready to begin work early next year and it was hoped direct sellers would start selling through them by April.

Concern from the floor that dairy companies would offer an extra penny a litre to lure producers away from the federation did not worry Mr Loftus unduly.

"The feedback so far shows it would take a lot more than a penny or two to make us break ranks," he said.

l Information on the campaign can be obtained from the Federation of Milk Producers, 60 Kenilworth Road, Leamington Spa, Warwickshire CV32 6JX.