A Welsh dairy farmers’ leader today demanded that banks must show the same goodwill as the Government showed them during the credit crunch following confirmation that the Dairy Farmers of Britain (DFB) milk co-operative had gone into receivership.

"The Government showed goodwill to the banks by helping to bale them out. Now the banks must repay that goodwill and stand by the members and employees of DFB," said the Farmers’ Union of Wales milk committee chairman Eifion Huws.

DFB employs a total of 2,200 at its cheese factory at Llandyrnog in north-east Wales and liquid milk dairy at Bridgend in south Wales plus other sites in the south-west and north-east of England and the Midlands.

"It also has 1,800 farmer members across Great Britain who supply over one billion litres to the food and drink industry who now stand to lose many thousands of pounds," said Mr Huws, an Anglesey dairy farmer and DFB member.

He added: "This is a sad day for DFB members, its staff and all its suppliers and it may stop other groups in the industry from setting up co-operative ventures which the Government is constantly encouraging us to do.

"It is estimated that the average DFB member will lose around £14,000 for their May and early June milk amounting to around £21m in total - in addition to an average farmer investment of around £25,000 which has already been lost.

"HSBC are understood to be the dominant banker for DFB members and I believe they should think very long and hard about how to help members by offering interest free loans, for example.

"After all, the loss of a much-needed milk cheque is a huge blow to all our cashflows. The question must now be put - how many more farmers can be expected to sustain such a big blow to their livelihoods?

"We wonder what will be the effect of the availability of all the extra milk for which DFB members will now be looking for a market," he added.