Question to the Department for Environment, Food and Rural Affairs:

To ask the Secretary of State for Environment, Food and Rural Affairs, if he will hold urgent discussions with with key stakeholders in the diary industry on managing the milk supply chain.

Defra is working very closely with both farmer and processor representatives through this period of disruption to manage the impact on the dairy supply chain of Covid-19 including holding a number of roundtable discussions with the sector. Farmers supplying milk to processors that sell into the food service sector have seen a significant reduction in demand and we have taken several steps to support those affected.

In order to support affected farmers, we have eased some elements of competition law to make it easier for processors to come together to maximise production and processing and storage efficiency until shops, restaurants and pubs are able to open again. This SI was laid before Parliament on 1 May and applies retrospectively from 1 April 2020. The Agriculture and Horticulture Development Board and Dairy UK have agreed to work with farmers and processors to help industry take advantage of these easements. The SI is available at the following link:

http://www.legislation.gov.uk/uksi/2020/481/contents/made

The Government's Covid-19 Business Interruption Loans scheme is available to the dairy industry and where this is appropriate for this business, I urge farm businesses to access the loans that are available to support them in this difficult period. Defra has held urgent discussions with the major banks to ensure they understand that farmers, milk buyers and milk processors are eligible for this scheme and we are working to increase awareness across the dairy industry. HMT have also now announced the new Bounce Back Loan scheme which will apply to businesses operating in agriculture. This will ensure that the smallest businesses can access up to £50,000 loans. The Government will provide lenders with a 100% guarantee on each loan, to give lenders the confidence they need to support the smallest businesses in the country. We will also cover the first 12 months of interest payments and fees charged to the business by the lender.

The Government also took a number of early emergency steps to support dairy farmers and the wider sector. These included designating employees in the food sector as key workers and temporarily relaxing the normal rules on drivers' hours, enabling the sector to keep supply chains running, including deliveries from farm gate to processors.

The existing public intervention scheme for skimmed milk powder and butter continues to be available. This provides a floor price for dairy products, supporting the dairy industry to sell skimmed milk powder and butter into public intervention when the price they would receive on the open market falls below the intervention price. The European Commission has this week approved the opening of additional measures for private storage aid which UK processors will be able to access should they chose to.

We will continue to engage closely with farmer and processor representatives to ensure that we support them throughout this challenging period.