The Royal Association of British Dairy Farmers (RABDF) is calling on the Government to help fund a short-term financial support scheme for dairy farmers whose businesses have been severely affected as a result of Coronavirus and to avert a larger crisis in the industry.
The Association has today (7th April) put forward plans to the Government asking them to reimburse dairy farmers who are receiving a significantly reduced value or are having to dispose of their milk as a result of their processor being heavily reliant on the food service sector.
It is thought about 300 dairy farmers will be eligible for reimbursement if the scheme is approved, equating to about one million litres of milk being produced a day.
The scheme aims to reimburse dairy farmers up to their standard milk price e.g. 25ppl for conventional, with the hope farmers, will be paid directly from the government in their monthly milk cheque, rather than via their processor.
The support will only be available to dairy farmers supplying a processor who can evidence their marketplace has been affected solely from the impact of Covid19. It will not be available to farmers who are still being fully paid or covered by insurance.
If the scheme is approved, the RABDF hopes the system for making claims, which is still being finalised, will be up and running by the end of April. This means farmers claiming will still receive their April milk cheque due in the second week in May.
The plan is to ensure that dairy farmers affected remain in business and can return to supplying the food service sector when social distancing measures are eased.
Impact on industry
Failure to protect those farmers could result in disruption to the wider dairy and agricultural industry along with an undersupplied market later in the year, warned Peter Alvis, Chairman of RABDF.
He said: “This scheme will ensure both short-term and longer-term food security and ease the stress on the industry.
“Removing the excess distressed milk from the market place will help to stabilise the current spot price without causing long-term market distortion.
“It will also allow those affected dairy farmers to continue to pay for invoices for farm inputs to the wider local/rural supply industry beyond the farmgate and will prevent extra cows being culled which will exacerbate the problems in the beef supply chain,” he added.
If the scheme is approved those claiming will have to:
- Show evidence of market failure solely due to Covid19. Both the processor and farmer will have to show this. The farmer must evidence their lost milk production, i.e. by comparison of monthly milk statement v last year’s milk statement.
- Make a claim each month.
- Dispose of milk by legally approved methods.
- Have their claims assessed to prevent fraud. If incorrect claims are identified or milk is not correctly disposed farmers could receive a fine via the BPS system.