Dairy aid package won’t help UK farmers, say critics

An emergency fund to help the dairy industry will do little to stop dairy farmers from going out of business, critics have claimed.

Industry experts said plans to dole out €29m (£25.2m) of EU money to UK dairy farmers would have no effect on struggling businesses.

Instead the money would be better spent on an industry initiative to drive higher prices and help producers invest in their farms, they said.

The criticisms came as DEFRA and the Welsh Assembly Government launched consultations on Wednesday (20 January) to decide how millions of pounds should be distributed among UK farmers.

The fund was handed to the UK by the EU last September after thousands of dairy farmers across Europe held protests over the slump in milk prices.

Farmers in the UK are being asked to decide if they want a payment per litre for milk produced between October 2008 and September 2009.

Alternatively they could agree to a payment per litre for the first 100,000 litres produced in the same period, with an additional payment over that amount.

Farm minister Jim Fitzpatrick said the funding would provide additional stability for farmers after a “challenging year” which saw difficult trading conditions and a fall in dairy prices.

But Andrew Thompson, managing director of consultants Promar, said the fund – which amounts to about £1600 per dairy farmer – would have no effect on businesses which are already struggling.

“I can’t help but think the money could be better on with a more focused initiative to look at direct action and making things happen,” he added.

“We will be making DEFRA aware that £1600 per farm will pay a bill, but they need to look at the bigger picture to look at what’s going on within the whole industry.

“Of course we would rather that farmers had extra money than none at all, but it could probably be used on something more substantive centrally.”

Dairy consultant Mike Bessey accused the EU of “throwing a crumb” to struggling dairy farmers.

“However it’s spent, £25m isn’t going to change the world,” he said. “But it’s important to recognise that whilst UK dairy farmers have been badly hit, the dairy industry here is not as bad as other countries.

“You can’t really make a case that UK farmers are on Queer Street as a whole – on average they are surviving and starting modest investment.”

Farmers have until 17 February to respond to the consultation.

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