Dairy farmers question 80% loss calculation

A number of dairy farmers have queried the basis used to calculate the coronavirus support funding coming to the sector later this year.

Last week, Agriculture Minister Edwin Poots confirmed that £11m out of a total of £21.4m will go to dairy farmers by way of a 1.1p/l to 1.2p/l payment on all milk produced from March to June.

But the Department’s own calculations show that the total loss suffered by dairy farmers was £15m, which would have worked out at a payment around 1.6p/l. It is understood that farming organisations made the case for a package to the dairy sector worth over £20m.

However, in a statement to the Stormont Assembly last week, Minister Poots justified the money allocated to the sector.

“I am aware that many milk producers have received benefit from the Self Employment Relief Scheme to compensate for loss in profits, and have taken out the Bounce Back Loan Scheme to alleviate capital costs. On that basis, I am compensating them for 80% of their losses,” he said.

Principle

The same principle is being applied for potato growers, and those in the ornamental horticulture sector. However, because beef and sheep farmers have not been able to benefit from the self-employed scheme (which is based on profits), they are to receive compensation for 100% of losses (£7m to beef and £232,000 to sheep).

“What proof does DAERA have that dairy farmers have benefited from these schemes? I know a lot of dairy farmers who received little or nothing from the self-employed scheme,” Waringstown dairy farmer Charlie Weir told the Irish Farmers Journal.

He said that the NI dairy sector remains in a very difficult place, with prices well below the costs of production.

“At the end of 2019, the prospects for milk prices looked good, and but for coronavirus, prices would be a lot stronger than they are now. CAFRE keep telling us that costs of production are 24p/l, yet independent analysis puts breakeven milk price at 27p/l, and supermarket aligned contracts in Britain are over 30p/l. NI farmers will be out of business unless prices improve very soon,” he said.

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