Government support for dairy sector scrutinised through EFRA inquiry

Michael Oakes, Dairy chairman

The NFU has welcomed the government support given to dairy farmers hit hard by Coronavirus disruption but is calling for further scheme changes to ensure that the support is properly targeted.

In its submission to an EFRA Committee inquiry into the government response to the effects of the COVID-19 pandemic on the dairy sector, the NFU said it welcomed the action taken by Secretary of State George Eustice following an intensive NFU and industry-wide campaign for help.

NFU dairy board chairman Michael Oakes said:

“The arrival of COVID-19 in the UK dealt our industry a huge blow. It saw the almost complete closure of foodservice and hospitality outlets, resulting in millions of litres of milk having no market, with many dairy farmers suffering huge losses, delayed payments and significant reductions in income.

“In our evidence to the EFRA Committee, we highlighted our thanks but reiterated our early warnings of the impact COVID-19 was having on the dairy sector and that urgent and decisive action was needed to help restore market confidence.

“We are grateful for the government’s issuing of dedicated support for dairy farmers, in challenging circumstances, through a relaxation of competition laws and the eventual announcement of the Dairy Response Fund. While we welcome the fund, we feel it has ultimately fallen short and taken too long, to proportionately mitigate the damage we have seen in the sector which has left many dairy farmers in a financially untenable position.

“The NFU has also made representation for specialist dairy producers, including the goat, sheep and buffalo sectors, to be included as a priority to the fund, as many have suffered financial hardship, seeing their markets vanish essentially overnight and not recovering.”

The main points in the NFU's submission to the EFRA Committee inquiry include:

  • The unjustified move to a milk price loss based Dairy Response Fund rendered many highly affected producers’ ineligible, and other elements of the fund have limited its scope severely.
  • Despite industry supplying substantial evidence to government, they did not take urgent and proportionate measures to ensure affected dairy farm businesses were safeguarded against further hardship through the pandemic.
  • While the market has shown some signs of recovery through individual efforts made by industry to manage supply, this masks some deeper, longer term effects for the industry to cope with.

    Chair of the EFRA Committee, Neil Parish MP, said:

    “The dairy industry has been hit hard by the Coronavirus lockdown. We are determined to find out whether government interventions made to help dairy farmers have been sufficient and fair, and whether any ongoing issues have been overlooked.”

    The submission may be published online over the coming weeks and the NFU has welcomed the opportunity to provide this feedback to the EFRA Committee and looks forward to contributing an oral response later in the year.

    Dairy contracts consultation: All you need to know

    The NFU is urging dairy farmers to engage with the long-awaited government consultation on dairy contracts and speak up for a more effective dairy supply chain, with fairer terms for farmers.

    The government has launched the consultation after looking at the issue for two years, since a review of supply chain fairness by the Grocery Code Adjudicator found an uneven distribution of power within the dairy supply chain.

    Here, you'll find everything you need to know about the consultation and how to respond. Visit our dairy contracts consultation hub.

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