Dairy cows grazing on grass© Tim Scrivener

Defra is considering the introduction of a scheme to support smaller, pasture-based dairy farms in England and offering full grants for milk producers who install covers over their slurry stores.

The ideas have been proposed as the best way of spending €18.7m (£16.2m) of emergency EU funding, which is part of the €500m (£433m) aid package announced by the European Commission to support farmers in the face of ongoing market difficulties.

The UK has been given €30m (£26m) to spend on an “exceptional adjustment aid” scheme, of which England’s farmers will get €18.7m (£16.2m).

Defra has said given the severity of the crisis in the dairy sector milk producers should be the main beneficiaries.

See also: 1,800 farmers apply for EU dairy reduction scheme

The devolved regions are working up their own proposals.

Defra has published a consultation, which runs until 7 October, which outlines three ideas for how the money should be spent.

It proposes:

  • To offer 100% grants to farmers who cover slurry tanks, lagoons or manure heaps in a bid to reduce their ammonia emissions
  • To offer dairy producers training in financial instruments and risk-management tools to help them cope better with volatile markets
  • To develop schemes targeted at encouraging more extensive, grass-based farming systems.

Defra has also indicated it will consider alternative options so long as they meet its criteria.

For example, the money must be spent by September 2017 and deliver a lasting positive impact.

Alternatives

Sian Davies, NFU chief dairy adviser, said the NFU would put forward some alternatives.

Previous discussions with members had indicated their preference for the money to be spent on projects that help everyone – regardless of size or scale.

Ideas include investing in a national animal health scheme to tackle problems such as bovine TB, Johnes and bovine viral diarrhoea, or supporting farmers who want to join a producer group or co-operate with each other.

Another idea would be to use the money to pump-prime a dairy margin insurance scheme, as operates in countries such as the US.

“We will consult further with members and put forward our own proposals for how the money should be spent,” she said.

The EU’s support package was announced in July by farm commissioner Phil Hogan.

In total, €350m (£434m) was allocated to adjustment aid schemes, which will run in each member state, and another €150m (£136m) was allocated to a voluntary milk reduction scheme.