Support for Covid-19 ravaged dairy sector a welcome step - but more must be done

The Farmers’ Union of Wales has cautiously welcomed measures introduced to aid the dairy industry, which has been impacted severely by the closure of the food services sector and the realignment of the supply chain and market prices.

The temporary easing of competition laws, which apply across the whole of the UK, is hoped to enable greater collaboration so the dairy sector, including dairy farmers and processors, can work closer to solve the issues it is facing.

The temporary suspension of competition laws for the dairy sector was one of the options the FUW discussed with the Rural Affairs Minister as part of the Agricultural Resilience Group.

Responding to the announcement, FUW Milk and Dairy Committee chairman Dai Miles said: “This is a welcome step in the right direction. It will allow for a more accurate picture of the volumes of milk out there, which processors wanted. It will allow them to collaborate. 

“However its effect on farmers could be negative and other support measures must be put in place urgently. Of course, we need a more accurate knowledge of surplus milk but with that comes the danger of it having a negative effect on the spot prices - which a lot of dairy farmers are dependent on. 

“So as welcome as this announcement is, when accompanied by good will on the part of companies, there is a risk it will play into the hands of those companies least affected . Unless this knowledge is used to implement a compensated volume reduction scheme, it could cause more harm than good.”

To continue its work in supporting the dairy industry, the FUW alongside others, have written to Secretary of State George Eustice to stress that  no single measure will provide a complete answer for this unique combination of circumstances.

Outlining key asks, the letter specifically asks that the there is:  

  • A targeted grant scheme for affected famers that is similar to the Retail and Hospitality Grant Scheme; 
  • A fully funded, Government run voluntary national production reduction scheme; 
  • Engagement with the EU Commission to introduce market support measures, such as Private Storage Aid.  

“Whilst it is a case of better late than never, the Government must understand that farmers play a crucial role in, not just producing food for the nation, but keeping the wheels of our rural economy going. 

“Let’s not forget that for every £100 generated on farm, £60 is spent within 7 miles of the farm. We continue to highlight the knock-on impact of failing dairy businesses on other businesses heavily reliant on agriculture and that if our dairy farm businesses fail - so will our rural economy,” added Dai Miles.