DAIRY farmers will be able to access up to £10,000 each to help them overcome the impact of the coronavirus outbreak.

The new funding will help to support dairy farmers – who together continue to produce over 40 million litres of milk every day but who have seen decreased demand for their products as bars, restaurants and cafes have had to close.

Defra's announcement on May 6 will build on the 'unprecedented' levels of support already announced by the Chancellor and recent action to temporarily relax some elements of UK competition law to allow suppliers, retailers and logistics providers in the dairy industry to work more closely together on some of the challenges they are facing.

With some dairy farmers facing financial difficulties and excess milk, the new fund will provide support for those most in need. Eligible dairy farmers will be entitled to up to £10,000 each, to cover 70 per cent of their lost income during April and May to ensure they can continue to operate and sustain production capacity without impacts on animal welfare.

It also came as the Government backed a £1 million campaign to boost milk consumption and help producers use their surplus stock.

Environment Secretary George Eustice said: "Our dairy industry plays a crucial role in feeding our nation and we are doing all we can to ensure they are properly supported during this time.

"We’ve already relaxed competition laws so dairy farmers can work together through the toughest months, but recognise there is more to be done. That is why today we have kick-started a new campaign to boost milk consumption and have announced a further package of funding.

"We will continue to stand alongside our dairy farmers through this difficult period."

The dairy sector is the UK’s largest farming sector, with milk accounting for 16.85 per cent of total agricultural output in the UK in 2018. Since the start of the coronavirus outbreak, the dairy industry has faced challenges of excess milk, falling prices, and reduced demand from the hospitality sector.

While many farmers have already re-routed their milk supplies to retailers and supermarkets – which have seen increased demand in recent weeks – Defra said the move would give the farmers in the greatest need the financial assurance to ensure they can remain operational, sustain production capacity and continue to meet animal welfare demands at this time.

Eligible dairy farmers who have lost more than 25 per cent of their income over April and May due to coronavirus disruptions will be eligible to access this funding for those qualifying months, with no cap set on the number of farmers who can receive this support or on the total funding available.

The UK’s food supply chain remains resilient and the Environment Secretary continues to meet regularly with representatives of the food and farming industry to ensure people can get the food and groceries they need.

The Royal Association of British Dairy Farmers (RABDF) welcomed news of the financial support package and hoped the money would help support those farmers most severely affected.

RABDF chairman Peter Alvis said: “We are thankful Defra has taken the dairy industry’s needs seriously and has produced a financial support package.

“We would like Defra to keep reviewing support measures for the industry as we are conscious that should our farmers continue to be impacted for an extended period, we will need the government to act quickly and look at some additional support.”

Mr Alvis urged producers receiving a reduced milk value or having to discard milk as a result of Covid-19 to continue filling in the RABDF milk losses survey at rabdf/co.uk/survey.

He added: “We presented the first round of data to Government last week and we need to continue presenting them with this data. Only by having accurate data can we highlight when additional support is needed.”

He said the Government also needed to consider the needs of sheep, goat and buffalo farmers producing milk, with many directly affected as a result of the disruption to the food service sector.

CLA president Mark Bridgeman said: “We welcome the news that dairy farmers have been offered much-needed financial support from the Government to help get through these challenging times.

“Many dairy farmers have been experiencing major cashflow problems for weeks due to the food service sector closing down in the midst of Covid-19.

“It’s important that we support our dairy farmers so that they are still able to produce milk for doorstep delivery, retail market and processing into butter and cheese in the future when markets return to normal.

“These grants will help overcome some of their financial losses, but the situation is urgent for many businesses so they must be straightforward to access and quick to pay out.”

NFU president Minette Batters said: “Thankfully, the Secretary of State has heard our calls for help and is stepping in to prevent a catastrophe for the dairy sector. This package of support from Defra will help many iconic dairy farming businesses facing an uncertain future as a result of the impacts of the coronavirus outbreak.

"We know that the dairy sector is just one of many sectors that have been affected by Coronavirus, but we appreciate the hard work Defra has put in to secure this much-needed financial support for many dairy farming families who face losing their businesses.”

NFU dairy board chairman Michael Oakes said: “The NFU alongside other industry representatives have worked relentlessly over the past few weeks to ensure support reaches those hard-working dairy farmers facing immediate financial hardship due to the effects of market volatility.

“While this support package will be helpful for those farmers who are currently under considerable financial strain, we believe a combination of measures are needed in order to stabilise the industry’s viability for the medium and long term. Dairy farmers need much better contractual protection than they currently enjoy and that needs to be examined by government as a matter of urgency once we move to the recovery phase of the current crisis.”