Dairy Farming: Coronavirus:Written question - HL3680

Asked on: 29 April 2020
Department for Environment, Food and Rural Affairs
Dairy Farming: Coronavirus
To ask Her Majesty's Government, further to the letter sent to Peers by Lord Gardiner of Kimble on 22 April, when they expect to receive the proposals by the Agriculture and Horticulture Development Board and Dairy UK about the alleviation of overproduction in the dairy farming sector during the COVID-19 pandemic.
Answered on: 14 May 2020

Dairy farmers are crucial in ensuring that food supplies remain resilient in this difficult period. While the vast majority of the UK's dairy farmers are largely unaffected some have been directly impacted by the closure of the food service sector as a result of the lockdown measures taken in response to COVID-19. Between 5 and 10 per cent of total milk production goes to the food service trade. We continue to work closely with the National Farmers Union, the Agriculture and Horticulture Development Board (AHDB) and Dairy UK to ensure that those most affected are supported.

In recognition of the unprecedented challenges facing this sector on 7 May we announced 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 AHDB, together with Dairy UK, have launched a new £1 million campaign to drive an increase in the consumption of milk. Running over 12 weeks, the campaign will highlight the role that milk plays in supporting moments of personal connection during times of crisis. Defra and the devolved administrations are jointly contributing towards the financing of this campaign.

The dairy industry can also access various Government backed loan schemes. The COVID-19 Business Interruption Loan Scheme is available to dairy farmers, milk buyers and milk processors. In addition, the new Bounce Back Loan scheme applies to businesses operating in agriculture and will ensure that the smallest businesses can access up to £50,000 loans.

We also took a number of early emergency steps to support dairy farmers and those in other sectors. These included designating employees in the food sector as key workers and temporarily relaxing the normal rules on drivers' hours, enabling the sector to keep supply chains running, including deliveries from farm gate to processors.

Public intervention for skimmed milk powder and butter also continues to be available. Industry can sell skimmed milk powder and butter into public intervention when the price they would receive on the open market falls below the intervention price. This provides a floor price for dairy products. UK processors are also eligible for the recently opened private storage aid scheme for dairy.

Furthermore, the statutory instrument (SI) temporarily relaxing some elements of competition law for the dairy industry was laid before Parliament on 1 May 2020 and applies retrospectively from 1 April 2020. This makes it easier for the dairy industry to collaborate to maximise production, processing and storage efficiency in order to avoid wastage and to ensure that as much product as possible can be processed into high quality dairy products. The AHDB and Dairy UK have offered to work with the dairy industry to support the enactment of the powers under the SI. We and the Devolved Administrations are working closely with them on this.

We will continue to engage closely with representatives from all parts of the dairy supply chain to support the sector throughout this challenging period.

Grouped Questions: HL3679 | HL3681

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