The UK’s National Farmers Union (NFU) has asked the country’s government for a coronavirus-linked “crisis” meeting to discuss the dairy sector’s problems.
In an open letter, NFU president Minette Batters has called on George Eustice, the Secretary of State for Environment, Food and Rural Affairs (Defra), to meet with her and take immediate steps to ensure the sustainability of the dairy sector.
The NFU said the Covid-19 outbreak has seen the almost complete loss of the foodservice 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,” it said.
The letter was sent before the Easter bank holiday but a NFU spokesperson said that as of this morning (14 April) it had not received a reply from Defra. However, in a statement sent to just-food, Eustice said he had spoken to Batters and intends to remain in regular contact with the NFU.
In the letter, 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 added: “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.”
The NFU is urging Defra to “convene with key stakeholders and help manage flows of milk through the supply chain” and asking for a scheme to be set up for businesses in the agricultural sector that is similar to the Retail and Hospitality Grant Scheme, which provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to GBP25,000 (US$31,447), “providing a much-needed lifeline for businesses”.
It also wants the UK government to engage with the EU Commission about schemes such as production reduction and market promotion to help “restore confidence in the market and prevent adverse publicity related to disposal of milk”.
In a statement sent to just-food today, Secretary of State Eustice said: “I know this is a challenging time for the industry, and this afternoon I had another constructive call with NFU president Minette Batters to discuss these issues, and the dairy sector in particular. I welcome the initiative from milk suppliers and their farmers to temporarily reduce the amounts they are producing, so that when the demand returns our dairy farmers can once again rise to meet that.
“We have temporarily relaxed competition laws to enable retailers, their suppliers and logistic services to work together to feed the nation. I also urge any farm business to access the loans that are available – like other businesses across the UK, they can access loans of up to GBP5m from their bank, with the first year of payments interest-free.
“I will remain in regular contact with the NFU and other representatives from the dairy sector to ensure they are supported through this difficult period.”
Last week, dairy industry groups in the US urged the government there to provide a “comprehensive action” plan for the sector as the Covid-19 crisis causes a disparity between supply and demand in that market.