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Farmers: Coronavirus

Department for Environment, Food and Rural Affairs written question – answered on 19th May 2020.

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Photo of John Hayes John Hayes Conservative, South Holland and The Deepings

To ask the Secretary of State for Environment, Food and Rural Affairs, what steps he is taking to support farmers during the covid-19 outbreak.

Photo of Victoria Prentis Victoria Prentis The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

We are working closely alongside the agricultural industry to ensure that we understand and manage the impacts to the industry.

Defra has been in close discussion with banks to ensure the farming sector has access to financial support to ease cashflow problems during this period, including through the Government-backed Coronavirus Business Interruption Loan Scheme and the Bounce Back Loan scheme, which was announced on 27 April and is the latest step in a package of support measures announced by the Chancellor. The Government will provide lenders with a 100% guarantee on each loan, to give lenders the confidence they need to support small businesses. These loans will be from £2,000 up to £50,000, capped at 25% of firms’ turnover, and the Government will cover the first 12 months of interest payments and fees charged to the business by the lender. Almost all UK businesses will be eligible to apply for a loan under the scheme.

In March, Defra worked with the Department for Business, Energy and Industrial Strategy to introduce new measures to support businesses in the food sector to keep food supply flowing on to shelves and into homes. These included a temporary relaxation of competition rules to allow supermarkets to work together. The legislation to bring in this change was introduced on 27 March and has a retrospective effect from 1 March.

In April, we temporarily relaxed further elements of competition law to support the dairy sector during this period. Legislation was laid before Parliament on 1 May to enable collaboration between dairy farmers and producers, supporting them to adapt to changes in the supply chain including decreased demand from the hospitality sector. The legislation will apply retrospectively from 1 April 2020.

On 6 May, Defra announced a new fund to support English dairy farmers who have seen decreased demand because of the loss of the food service sector. Dairy farmers 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. Eligible dairy farmers who have lost more than 25% of their income over April and May because of coronavirus disruptions will be eligible for funding of up to £10,000 each, to cover around 70% of their lost income during the qualifying months to ensure they can continue to operate and sustain production capacity without impacts on animal welfare. The Welsh Government announced the opening of a similar scheme on 12 May.

The availability of this funding followed the launch on 5 May of a joint Government and Devolved Administrations backed £1 million campaign aiming to boost milk consumption and help producers use their surplus stock. This 12-week campaign is being led by Agriculture and Horticulture Development Board (AHDB) and Dairy UK. This follows a similar ongoing campaign led by AHDB and retailers to promote the consumption of beef products.

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