Dairy farmers are calling on the Government to help fund a short-term financial support scheme for farmers severely affected by Covid-19 market crashes.
It comes as several UK farmers have been forced to dump their milk as processors say they have no market for it.
The Royal Association of British Dairy Farmers (RABDF) said it was putting the plans forward today (April 7) to “avert a larger crisis” in the industry.
It’s asking the Government to reimburse dairy farmers who have been asked to dump their milk or are receiving a significantly reduced value for it as foodservice sector orders fall off.
It is thought about 300 dairy farmers will be eligible for reimbursement if the scheme is approved.
85% of non-retail liquid milk sales in Britain are thought to go into foodservice.
Figures collated by AHDB show foodservice outlets buy as much as eight million litres of milk a week from processors in England, Scotland and Wales. However, this figure does not take into account butter and cream sales.
Proposals
The proposed scheme aims to reimburse dairy farmers up to their standard milk price – for example, 25p/L 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 Covid-19.
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. If this happens, it means farmers claiming could still receive their April milk cheque due the second week in May.
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 RABDF chairman Peter Alvis.
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 Covid-19. 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 compared to 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.
