Defra is working very closely with the dairy and other agricultural sectors through this period of disruption to manage the impact of COVID-19 on the dairy supply chain.
We have eased some elements of competition law to make it easier for dairy processors to come together to maximise production, processing and storage efficiency and ensure as much product as possible can be processed into high quality dairy products.
Moreover, in recognition of the unprecedented challenges facing this sector we announced on 7 May a new fund to support those dairy farmers who have seen decreased demand due to the loss of the food service sector. Eligible dairy farmers in England who have lost more than 25% of their income over April and May due to coronavirus disruptions will be eligible for funding of up to £10,000 each, to cover 70% of their lost income during this qualifying period. This will enable these producers to continue to operate and sustain production capacity without impacts on animal welfare.
The Agriculture and Horticulture Development Board together with Dairy UK have launched a new £1 million campaign running over 12 weeks to drive an increase in the consumption of milk. Defra and the devolved administrations are jointly contributing towards the financing of this campaign.
Alongside the COVID-19 Business Interruption Loans Scheme, HMT has announced the new Bounce Back Loan scheme which will also apply to businesses operating in agriculture. This will ensure that the smallest businesses can access up to £50,000 loans. The Government will provide lenders with a 100% guarantee on each loan, to give lenders the confidence they need to support the smallest businesses in the country. We will also cover the first 12 months of interest payments and fees charged to the business by the lender.
A vibrant tenanted sector is vital to a successful future for agriculture, a third of agricultural land in England is tenanted. Tenant farmers can access the business support schemes the government has put in place to help in these unprecedented times.
In addition, Defra has worked closely with the Country Land and Business Association and the Tenant Farmers Association on a joint initiative to encourage all rural landlords and tenants to work together collaboratively and compassionately at this time in respect of all tenancy matters, but particularly regarding rent payments, notices to quit and finalising new tenancy agreements. Furthermore, from 27 March 2020, court possession proceedings have been suspended for a 90-day period. This is in line with public health advice to limit all nonessential movement and it provides agricultural tenants with additional assurance that they are protected from eviction proceedings during this difficult time.
As the situation evolves Defra will continue frequent engagement with farming (including tenant farming) and processor representatives to understand the urgent support needed to help ensure the continued viability of all parts of the sector.