Dairy farms demand urgent action to save businesses as milk demand dries up
- Credit: Matthew Usher
Dairy farmers have called for urgent government action to help their businesses survive the coronavirus lockdown after demand for milk dried up from cafes and restaurants.
The outbreak has seen the almost-complete loss of the sector’s food service and hospitality markets, as well as increasing global price volatility which has left farms and processors under pressure.
Farmers in some parts of the country have been forced to pour away their cows’ milk because it was not being collected by processors as demand slumped.
National Farmers’ Union (NFU) president Minette Batters has urged Defra secretary George Eustice to take “immediate steps” to mitigate the impacts of “this unfolding crisis on dairy farming businesses across the country”.
And 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 by the pandemic.
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The short-term scheme would ensure dairy farmers stay in business through the current crisis, and are able to start resupplying restaurants, hotels and cafes when the lockdown eases and food outlets reopen, it said.
The RABDF wants the government to reimburse farmers who are receiving a significantly reduced value for their milk or are having to dispose of it because their processor is heavily reliant on the food service sector.
READ MORE: Subscribe to our daily coronavirus newsletter, with all the latest from where you livePeter Alvis, chairman of RABDF said: “This scheme will ensure both short-term and longer-term food security and ease the stress on the industry.
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“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 farm gate and will prevent extra cows being culled which will exacerbate the problems in the beef supply chain.
NFU dairy board chairman Michael Oakes said a key issue is that dairy businesses mostly cannot access Treasury schemes designed to help businesses through the Covid-19 lockdown.
“We cannot furlough staff or stop milking cows, and things like business rate holidays don’t apply to us,” he said.
“We need Defra and the Treasury to work together to extend these schemes so that they can be utilised by everyone in the dairy sector.”
He added that the NFU was working urgently with the government and supply chain businesses to find solutions, including diverting milk into the retail sector and developing measures to support affected farmers through the crisis.
Environment secretary Mr Eustice said he has had “constructive calls” with Ms Batters to discuss issues in the dairy sector.
“I know this is a challenging time for the industry,” he said. “I welcome the initiative from milk suppliers and their farmers to temporarily reduce the amounts they are producing, so that when the demand returns our dairy farmers can once again rise to meet that.
“We have temporarily relaxed competition laws to enable retailers, their suppliers and logistic services to work together to feed the nation. I also urge any farm business to access the loans that are available – like other businesses across the UK, they can access loans of up to £5m from their bank, with the first year of payments interest-free.
“I will remain in regular contact with the NFU and other representatives from the dairy sector to ensure they are supported through this difficult period.”