The Covid-19 outbreak has seen the almost complete loss of the food service and hospitality markets, as well as increasing price volatility in global markets, which has left farm businesses and processors under increased pressure. This has led to some dairy farmers with no other option but to dispose of milk on farm.
NFU President Minette Batters has called on Defra Secretary of State, George Eustice, to a crisis meeting tomorrow and to take immediate steps to ensure the sustainability of the dairy sector.
Mrs Batters said:
“For weeks now, we have been flagging to government in our daily calls the issues within the dairy sector and working with Defra to try and find solutions. But the situation is becoming untenable. Only four weeks ago all of this milk was being used, losing businesses at this stage will leave consumers reliant on convenience stores and other difficult to reach outlets not being able to have access to the same supply of milk.
“We believe there may be at least 2,000 dairy farmers suffering severe financial pressure and that number is growing by the day as a result of the impacts of the coronavirus outbreak and as things develop very few dairy businesses will be left unaffected. We need to move fast to mitigate the impacts of this unfolding crisis on dairy farming businesses across the country.
“The Secretary of State needs to step in now and take urgent and decisive action, before it is too late and many of those iconic dairy businesses go to the wall.”
NFU dairy board chairman Michael Oakes said:
“A key issue is that dairy farmers or processors largely cannot access the Treasury schemes designed to help businesses through this crisis. We cannot furlough staff or stop milking cows, and things like business rate holidays don’t apply to us. 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.
“It’s important for everyone that we protect the UK dairy sector so when the eating out of home experience is allowed to operate normally again, we have the dairy farmers in business and with the capacity to produce milk that forms the basis for dozens of healthy and nutritious dairy products which are loved by the nation.”?
Key asks of government:
- The Retail and Hospitality Grant Scheme, which provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 providing a much-needed lifeline for businesses. The government should provide access to this scheme, or a similar scheme, for those in the agricultural sector affected by coronavirus market disruption.
- To engage with the EU Commission about schemes such as PSA, production reduction and market promotion to help restore confidence in the market and prevent adverse publicity related to disposal of milk. Government should explore all crown buying service contracts to make sure our NHS, military and prisons are all sourcing fresh milk. Government should also explore measures to inject cash into the sector via the 2020 BPS.
- Defra to urgently convene with key stakeholders and help manage flows of milk through the supply chain. It is essential that government convenes this meeting to maximise industry solutions and confirm that the temporary change to competition law will allow this to happen, without discussing prices.