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UK dairy industry welcomes COVID-19 aid from government

07 May 2020

UK government enacts new funding supports for dairy farmers facing hardship due to coronavirus, NFU and RABDF welcome new aid.

England’s dairy farmers will be able to access up to £10,000 each to help them overcome the impact of the coronavirus outbreak.

The new funding will help support dairy farmers – who together continue to produce over 40 million litres of milk every day – who have seen decreased demand for their products as bars, restaurants and cafes have had to close.

The 6 May announcement is 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.

With some dairy farmers facing financial difficulties and excess milk, 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 percent of their lost income during April and May to ensure they can continue to operate and sustain production capacity without impacts on animal welfare.

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

Environment 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 percent of total agricultural output in the UK in 2018. Since the start of the coronavirus outbreak, the dairy industry has faced challenges of excess milk, falling prices, and reduced demand from the hospitality sector.

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.

Eligible dairy farmers who have lost more than 25 percent of their income over April and May due to coronavirus disruptions will be eligible to access this funding for those qualifying months, with no cap set on the number of farmers who can receive this support or on the total funding available.

It comes as the Agriculture and Horticulture Development Board (AHDB) has launched a 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.

The £1 million promotional campaign will to 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.”

The UK’s food supply chain remains resilient and the Environment Secretary continues to meet regularly with representatives of the food and farming industry to ensure people can get the food and groceries they need.

NFU response

After considerable NFU and industry-wide campaigning for dairy sector aid, NFU President Minette Batters welcomed the announcement, saying: 

“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.”

RABDF welcomes financial support, but warns more may be needed 

The Royal Association of British Dairy Farmers (RABDF) has welcomed news of a financial support package and is hopeful the money will help support those farmers most severely affected.

RABDF chairman Peter Alvis said: “We are thankful Defra has taken the dairy industry’s needs seriously and has produced a financial support package.

“We would like Defra to keep reviewing support measures for the industry as we are conscious that should our farmers continue to be impacted for an extended period, we will need the government to act quickly and look at some additional support.”

Mr Alvis urged producers receiving a reduced milk value or having to discard milk as a result of COVID-19 to continue filling in the RABDF milk losses survey.

He added: “We presented the first round of data to Government last week and we need to continue presenting them with this data. Only by having accurate data can we highlight when additional support is needed.”

Mr Alvis also urged the devolved administrations to follow in Defra’s footsteps.

He said: “Interim results from our survey showed County Antrim was the fourth worst affected county with 1.2 million litres of milk receiving a reduced value or not being collected. As a result, the devolved governments need to look at offering similar support.”

He said the Government also needed to consider the needs of sheep, goat and buffalo farmers producing milk, with many directly affected as a result of the disruption to the food service sector.



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