Single payment advance for dairy producers hit by collapse of dairy farmers of Britain
Dairy producers in Wales who did not receive re-imbursement in May for milk supplied to the former Dairy Farmers of Britain (DFoB) and who meet the conditions of the Single Payment Scheme, will receive, from 16 October, an advance on their CAP Single Payment that would ordinarily be paid from December.
Rural Affairs Minister Elin Jones made the announcement today [7 July] following discussions with the industry.
The Minister said:
"The demise of Dairy Farmers of Britain dealt a financial blow to some 281 dairy producers in Wales who were supplying the company. These producers have not been paid for milk supplied in May and early June, and they will have also lost the significant financial investment they made in the co-operative.
"The Welsh Assembly Government has no power to intervene in matters relating to the operation of the milk market. On the other hand, we have some flexibility within the EU rules that allow an advance to be made on the 2009 CAP Single Payment. I have decided to exercise that flexibility, given the specific circumstances, to those milk suppliers in Wales directly affected by the DFoB situation.
"I have made clear to the farming unions that the advance to the Welsh DFoB suppliers is an exceptional measure. I have also given my assurance that taking this action will not detract from the track record in Wales of the full Single Payment being released to some 90 per cent of recipients by the end of year.
"Whilst I realise that other farmers may now want to make representations to receive advance payments, I have taken this decision to allow a small number of farmers to receive payment in an exceptional circumstance. It will not be possible to advance pay any other larger group of farmers, as this could jeopardise our ability to pay such a high proportion as usual in December.
"I am aware that the dairy sector is vulnerable to fluctuations in the market for dairy produce, both locally and from the global market. However consumer demand for dairy products is increasing and there are still opportunities to be gained by the industry in the short, medium and longer term and I am confident that Wales will continue to have a viable dairy industry."
The Single Payment advance will be 70% of the full 2009 payment due. The full Single Payment Scheme conditions must be met and payments can only be made once all validation checks have been successfully completed.
The Minister and Welsh Assembly Government officials have been in close contact with Price Waterhouse Coopers and the industry since the collapse. Latest information (26 June 2009) from the Receiver/Manager is that, of the 1813 producers (281 in Wales ) supplying milk to DFoB at the time of the collapse, 1759 have found new homes for their milk from various dairy companies including Milk Link/First Milk and Arla.
Of the producers affected in Wales, fewer than 20 of them struggled to find a buyer for their milk for various reasons including their remote location or relatively low volume output. Welsh Assembly Government’s Farming Connect advisors have pursued contact with these producers to discuss the issues and offer advice. Most have now secured supply contracts, while five reported an intention to retire.
