Struggling dairy farmers in the UK have started to receive farm aid cash from the European Union to help their dwindling cash flows.
The payments announced by EU Farm Commissioner Phil Hogan back in September landed in farmers' accounts on Monday, 2 weeks ahead of schedule. The first payments have been made to over 10,000 farmers across England, Scotland, Wales and Northern Ireland, three-quarters of all eligible farmers, and amounting to almost £19.2 million (€27.4 mln).
Payments to NI dairy farms reflects suffering on prices
The government says payments will continue through November and December. Farmers are being paid a flat rate for every litre they produced in the 2014/2015 final quota year.
The flat rate for dairy farmers in England, Scotland and Wales is just under 0.176p per litre(€0.25), while in Northern Ireland it is just under 0.226p (€0.32) per litre. This is in recognition that milk producers in Northern Ireland have been suffering from some of the lowest prices across Europe and are more susceptible to volatility.
Payments fall short
However, the money falls short of what is needed to really make a difference. NFU Scotland milk committee chairman, Graeme Kilpatrick, said: "The European dairy aid package, celebrated by those in Brussels as a meaningful way to support those farmers facing severe cash flow difficulties, falls short on 2 counts. "The amount of money being provided to dairy farmers, while a welcome boost to cash flows at this difficult time, is a fraction of the considerable losses being faced by those whose market exposure is putting severe strains on their business. Secondly, the way the payment is being distributed in Scotland fails to recognise those most in need.
Payment distribution favours administration ease not need
"The NFUS milk committee took the view that the money should have been targeted at those dairy farmers most exposed to the low prices in the market – something that others in Scotland were willing to support. "The decision was taken by the Scottish Government that the distribution of this money should be administered by the UK Rural Payments Agency and was ultimately led by the UK Government's preference that, for ease of administration, the money would be shared equally amongst all dairy farm businesses based on historic production.
"The choice from within the Scottish Government not to administer payments themselves was their own, but largely driven by the need to focus resources on resolving the ongoing problems delivering the Basic Payment Scheme."
UK secured large dairy support package from EU
The UK government secured £26.6 million (€37.95 mln) in support from the European Commission in September, which was the third largest support package among Member States, to help dairy farmers affected by the current global volatility in milk prices. UK ministers agreed to pay a flat rate linked to milk production and for the Rural Payments Agency to pay out the money on behalf of the administrations in Scotland, Wales and Northern Ireland as well as England.
UK Farming Minister George Eustice said: "It's been a tough year for dairy farmers grappling with low prices for the milk they produce. "We fought for, and secured, one of the largest support packages amongst EU countries and the RPA has pulled out all the stops to start making these important payments 2 weeks earlier than planned. I hope these payments will now provide some much needed relief for dairy farmers across the UK. "In addition to this short-term support, our work to increase the long-term resilience of the industry continues, including introducing a fairer tax system, pushing for clearer labelling of British dairy products and setting up a futures market for dairy.
"We are also working with the industry to open up new export markets and only last week, dairy businesses from across the UK were out in Shanghai exhibiting their wares as part of the Secretary of State's trade mission to promote Britain's high-quality dairy produce to the Chinese." Meanwhile, the RPA is on track to make full payments on Basic Payment Scheme 2015 claims as soon as possible within the payment window, making the majority of payments in December and the vast majority by the end of January.