News | Published April 28 2020

Government weighs up support for dairy industry

The government is considering providing support to the dairy industry in the form of hardship payments to farmers, while the Department for Environment, Food and Rural Affairs [DEFRA] has already relaxed competition law to help the sector.

Demand for dairy products has fallen sharply, particularly in the hospitality industry with cafes and restaurants forced to close under Covid-19 lockdown measures. This has resulted in some farmers being forced to discard large amounts of milk, as UK production approaches its usual peak.

Dairy farmers have warned that they may have little alternative but to send tens of thousands of cows to be slaughtered.

Former environment secretary Owen Paterson said: "There is an urgent need for some form of rapid hardship fund for the minority of dairy farmers, who temporarily have no market for their milk, to avoid seeing cows slaughtered."

Conservative MP for West Dorset, Chris Loder, added: "The government must act urgently to provide a hardship fund to support dairy farmers in desperate need to avoid any culling of the national herd."

Incumbent environment secretary George Eustice will hold talks with MPs and trade bodies on Tuesday.

Eustice has already issued a letter to MPs, which reads: "Between five per cent and ten per cent of total milk production goes to the food service trade and there is therefore a small proportion of milk production that currently has no home.

"The vast majority of Britain's 10,000 dairy farmers continue to supply their contracts at the usual price."

The letter has received criticism from some corners of the sector.

Meanwhile, DEFRA has informed farmers that it can access existing support packages provided by the government.

Tory MP Sir Geoffrey Clifton-Brown said that he did “not want to see tens of thousands of cows slaughtered unnecessarily due to coronavirus” but warned that even a targeted and time-limited hardship payment could cost between £10 million and £20 million.

Trade bodies including the National Farmers Union, Dairy UK and the Provision Trade Federation are said to be working with the government and holding talks regarding targeted grant support.

A DEFRA spokesperson said: "We have already relaxed competition laws to allow the dairy industry to reroute surplus milk and adapt to changes in the supply chain.

"We also welcome the initiative from milk suppliers and their farmers to temporarily reduce the amounts they are producing, through a range of options, so that when the demand returns it can be met by our dairy farmers.

"We will continue to work with the industry to understand the potential impacts on farmers and also urge them to access the existing package of government financial support available."

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Authored by

Alexander Bridge-Wilkinson
Junior Editor
April 28 2020

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