DEFRA MAY be acting illegally by phasing out special premiums payable to English dairy farmers, says top euro barrister, Paul Stanley.

He says the dairy premium and additional payment must be paid to dairy farmers according to EU law, and has recommended that English dairy farmers mount a legal challenge against DEFRA.

They face a competitive disadvantage against the other UK regions, who will receive the payments in full, he argues.

The two subsidy payments were agreed as part of the 2003 CAP reform in Brussels to compensate farmers for cuts to the butter and skimmed milk powder intervention prices.

SFP Umbrella

But DEFRA says it plans to include the money under the umbrella of the single farm payment as a historical subsidy, which will be gradually phased out in England and replaced by the flat-rate area payment.

Charles Holt of the Farm Consultancy Group, who commissioned the barrister and is leading the campaign to challenge DEFRA, said: “As the reform stands, dairy farmers in England will lose about 6p/litre in total over the next seven years.

“For a dairy farmer producing 1m litres a year, this is a loss of 60,000 compared with his Scottish, Welsh and Northern Irish neighbours. DEFRA appears to be reallocating half the funding – 500m to 600m – destined for the Dairy Premium and Additional Payment away from dairy farmers.”