Government support for dairy farmers to go under spotlight

POLITICIANS investigating how the coronavirus pandemic has affected dairy farmers have launched a call for evidence,

The Environment, Food and Rural Affairs (Efra) Committee wants to gain further insight on the Government’s actions to provide support for the sector, which since the start of the crisis has faced challenges of excess supply, falling farmgate prices and significantly reduced demand from food service and hospitality markets.

With an initial deadline of July 15, the cross-party group of MPs will look at three key areas, including whether the Dairy Response Fund – launched in May to provide up to £10,000 of funding to help farmers cover their virus-related losses – was a “fair and proportionate” response, and if there are any weaknesses in its design.

Neil Parish, chairman of the Efra Committee and Conservative MP for Tiverton and Honiton, said: “The dairy industry has been hit hard by the coronavirus lockdown.

“Our coffee shops and restaurants closed abruptly with a huge knock-on effect on the supply chain.

“Over the past few months we have seen demand for milk change dramatically, and prices slashed for many farmers.

“We are determined to find out whether Government interventions made to help dairy farmers have been sufficient and fair, and whether any ongoing issues have been overlooked. So we are seeking evidence from the sector in the coming weeks.”

The inquiry will also consider what impact other Government actions to support the dairy industry, such as the relaxation of competition law in April and the Intervention and Private Storage Agreement schemes administered by the Rural Payments Agency (RPA), have had on farmers.

It comes as the Department for Environment, Food and Rural Affairs (Defra) has launched a consultation on fairer milk contract terms, since a review of supply chain fairness by the Grocery Code Adjudicator found an uneven distribution of power within the British dairy supply chain.

Open until September 15, the call for evidence will be seeking views on whether future regulation such as a mandatory pricing mechanism within all contracts could help to strengthen fairness and transparency.