The £5m cost of dairy modulation

THE WELSH dairy industry will lose a staggering £5.5million between 2004 and 2006 due to modulation, claims NFU Cymru.

The union highlighted the figure at this year‘s United Counties Show held in the dairy farming stronghold county of Carmarthenshire.

Peter Francis, Chairman of NFU Cymru in Carmarthenshire, said dairy farmers struggling due to low milk prices will be hard hit in the pocket again.

“This will increase the financial burden on dairy farmers over the next couple of years,” said Mr Francis.

“In Carmarthenshire, this is a serious threat considering the importance of milk production to the economy of the county.”

Money would be creamed off dairy payments that were intended by the EU to ease the impact of reductions in intervention prices for butter and skimmed milk powder.

Mr Francis said NFU Cymru had written to the Welsh Assembly to express its concerns to the proposal to modulate new subsidy payments in 2004. 

According to the Welsh Assembly, the £5.5million will be used to provide additional funds for rural support measures, including agri-environment schemes such as Tir Gofal.

Mr Francis said it was ironic that running many dairy farms was not compatible with the scheme and producers would still miss out on the support available.

It is hoped that Tir Cynnal, the new agri-environment scheme for Wales, will address this problem

But it could be three years before dairy farmers will have access to this scheme.