Defra is working very closely with the dairy and other agricultural sectors through this period of disruption to manage the impact of Covid-9 on the dairy supply chain.
The Government encourages environmentally-friendly farming. Each farming method has its own benefits and it is a farmer’s commercial decision to choose the system that best suits their farm. Environmentally-friendly farming and food production can go hand in hand.
To support the dairy industry through impacts of Covid-19, we have introduced a wide range of measures, which will also benefit dairy farmers employing agro-ecological practices.
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.
AHDB together with Dairy UK have also launched a new £1m campaign to drive 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.
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.
The existing public intervention scheme for skimmed milk powder and butter continues to be available. This provides a floor price for dairy products, supporting the dairy industry to sell skimmed milk powder and butter into public intervention when the price they would receive on the open market falls below the intervention price. In addition from 7 May, UK dairy processors are also eligible to apply for EU funded private storage aid in respect of skimmed milk powder, butter and cheese.
For organic dairy farmers whose milk is being sold as conventional milk, we offered a derogation to allow these farmers to provide their cows with conventional feed in order to reduce costs.
The new Environmental Land Management scheme will be the cornerstone of our future agricultural policy. It will reward farmers and land managers for the delivery of public goods with public money. The ELM scheme is being designed collaboratively with stakeholders. We are considering how more environmentally-sustainable farming approaches, including organic farming and agro-ecological approaches, may fit within ELM where these contribute towards the delivery of environmental public goods. Land managers will be paid for delivering the following public goods set out in the 25 Year Environment Plan: clean air; clean and plentiful water; thriving plants and wildlife; protection from and mitigation of environmental hazards; beauty, heritage and engagement with the environment; mitigation of and adaptation to climate change
Meanwhile, Countryside Stewardship (CS) provides a stepping stone to the future scheme, paying for environmental enhancements now as area-based payments are phased out. CS supports Defra’s Strategic Objective of ‘a cleaner, healthier environment, benefitting people and the economy’. Through the scheme, farmers can apply for funding to improve their local environment – from restoring wildlife habitats and creating woodlands to managing flood risk.
We will continue to offer Countryside Stewardship agreements in 2021, 2022 and 2023.