Government announces new COVID-19 support fund for dairy farmers

The Government has announced new funding for the dairy sector to help to help farmers overcome the impact of the coronavirus outbreak. 

Dairy farmers in England will be able to access up to £10,000 each to help compensate for the dramatic fall off in demand resulting from the closure of bars, restaurants and cafes.

Some farmers have been forced to pour unwanted milk away

Some farmers have been forced to pour unwanted milk away

The impact of the lockdown measures has affected some farmers much more than others, plunging some into financial difficulties and resulting in a build of milk on farms, which is some cases has had to be poured away.

Defra said the new fund will provide support for those most in need. Eligible dairy farmers will be entitled to up to £10,000 each, to cover 70% of their lost income during April and May to ensure they can continue to operate and sustain production capacity without impacts on animal welfare.

Eligible dairy farmers will be those who have lost more than 25% of their income over the two-month period due to coronavirus disruptions. There will be no cap set on the number of farmers who can receive this support or on the total funding available.

More detail on the fund will be issued in due course

The announcement comes as the government today backed a £1million campaign to boost milk consumption and help producers use their surplus stock.

Defra Secretary George Eustice said: “Our dairy industry plays a crucial role in feeding our nation and we are doing all we can to ensure they are properly supported during this time.

“We’ve already relaxed competition laws so dairy farmers can work together through the toughest months, but recognise there is more to be done. That is why today we have kick started a new campaign to boost milk consumption and have announced a further package of funding.

“We will continue to stand alongside our dairy farmers through this difficult period”.

The dairy sector is the UK’s largest farming sector, with milk accounting for 16.85% of total agricultural output in the UK in 2018.

While many farmers have already rerouted their milk supplies to retailers and supermarkets, which have seen increased demand in recent weeks, today’s move will give the farmers in the greatest need the financial assurance to ensure they can remain operational, sustain production capacity and continue to meet animal welfare demands at this time, Mr Eustice added.

The new marketing campaign to increase consumption of milk in UK households, funded jointly by the AHDB, Defra, the Scottish Government, Welsh Government, Northern Ireland Executive and Dairy UK, will help increase sales of dairy products by encouraging the public to drink more milk.

Christine Watts, AHDB’s Chief Marketing Officer said: “This new innovative marketing campaign is a fantastic demonstration of what can be achieved when industry and Government join together to meet a common supply chain challenge.

“It will support dairy farmers and processors in driving demand for milk within households across the UK. It will link consumers’ love of the great taste of milk and dairy with how we are all having to manage these challenging times at home and at work.”

Defra said the announcement was the latest action from the government to support dairy farmers, building on the ‘unprecedented levels of support already announced by the Chancellor and our recent action to temporarily relax some elements of UK competition law to allow suppliers, retailers and logistics providers in the dairy industry to work more closely together on some of the challenges they are facing’.

Reaction

NFU President Minette Batters said: “Thankfully, the Secretary of State has heard our calls for help and is stepping in to prevent a catastrophe for the dairy sector.

“This package of support from Defra will help many iconic dairy farming businesses facing an uncertain future as a result of the impacts of the coronavirus outbreak. We know that the dairy sector is just one of many sectors that have been affected by Coronavirus, but we appreciate the hard work Defra has put in to secure this much-needed financial support for many dairy farming families who face losing their businesses.

 NFU dairy board chairman Michael Oakes said: “The NFU alongside other industry representatives have worked relentlessly over the past few weeks to ensure support reaches those hard-working dairy farmers facing immediate financial hardship due to the effects of market volatility.

 “While this support package will be helpful for those farmers who are currently under considerable financial strain, we believe a combination of measures are needed in order to stabilise the industry’s viability for the medium and long term. Dairy farmers need much better contractual protection than they currently enjoy and that needs to be examined by government as a matter of urgency once we move to the recovery phase of the current crisis.

“We are also concerned that the fund covers England only, but will work with the devolved administrations to ensure that support reaches all farmers affected.”

CLA President Mark Bridgeman said: “We welcome the news that dairy farmers have been offered much-needed financial support from the UK Government to help get through these challenging times.

“Many dairy farmers have been experiencing major cashflow problems for weeks due to the food service sector closing down in the midst of Covid-19.

“It’s important that we support our dairy farmers so that they are still able to produce milk for doorstep delivery, retail market and processing into butter and cheese in the future when markets return to normal.

 “These grants will help overcome some of their financial losses, but the situation is urgent for many businesses so they must be straightforward to access and quick to pay out.”

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