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The National Farmers' Union has welcomed UK supermarket chain Morrisons' announcement that it's to extend its support for British agriculture in a move towards taking greater responsibility for its dairy farmer suppliers.

The move, which will see Morrisons offer regional milk to local consumers at no extra cost, together with the creation of a Morrison's producer group, and steps to increase returns to dairy farmer suppliers through its two liquid milk processors, Dairy Crest and Arla, is seen as a step in the right direction by NFU dairy board chairman Gwyn Jones.

He said: "I support Morrison's for seeking to inject some further confidence and profitability into the dairy sector. With milk production declining in the UK Morrison's is sensibly seeking to secure their supply of milk.

"The NFU Vision for the dairy industry supported moves by retailers to get closer to dairy farmers in order to break down the barriers of mistrust, create clearer market signals and generate better transparency. In this respect today's announcement is significant and welcome.

"There is no doubt the dairy industry has experienced something of a roller-coaster ride in the last 12 months. While supply and demand dynamics are changing for the better, milk production still continues to fall and there are risks of much greater volatility in commodity markets ahead."