Can crisis talks deliver an end to the milk dispute?

Celebrity chefs have called for a boycott of low-paying supermarkets

Ministers are hoping dairy farmers and processors reach agreement at crisis talks today aimed at ending the escalating dispute over milk prices.

Environment Secretary Caroline Spelman and the Farming Minister James Paice were meeting both sides at the Royal Welsh Show in Powys this morning in an attempt to break the deadlock, which could disrupt milk supplies during the Olympics.

Last night more than 2,000 farmers took part in a third night of blockades of dairies in Somerset, Shropshire and Worcestershire, using tractors, according to the group Farmers for Action.

The Department for Environment, Food and Rural Affairs (Defra) wants the NFU and Dairy UK to establish of a new code of practice with a price mechanism to ensure farmers are paid above the 30p-per-litre cost of production. Mr Paice last night met with his Scottish and Welsh counterparts, Alun Davies and Richard Lochhead, to issue a united call for both sides to back the code. The talks had been due to take place tomorrow but were brought forward by the Government following days of protests.

Farmers for Action says cuts of 4p per litre in the "farmgate" price combined with rising feed costs could force hundreds of farms out of business. It has threatened to bring milk supplies "to a standstill" from 1 August unless the cuts are reversed.

Following calls for a boycott of the lowest-paying supermarkets by the chefs Jamie Oliver and Hugh Fearnley-Whittingstall, Morrisons yesterday increased its premium for farmers to 6p per litre, taking its price to 31p per litre. The move followed similar, but less generous, raises by Co-op and Asda over recent days, taking their respective prices to 29p and 27.5p. Marks & Spencer and Waitrose pay 32p and Sainsbury's and Tesco around 30p each.

But milk supplies for supermarket cheese, caterers and manufacturers are not covered by the premiums and are paid at 25p, so the protests are likely to continue. Defra wants farmers and processors to agree a voluntary code of practice to free farmers from one-sided contracts and include a price mechanism that reflects production costs.