UK govt spending £5 million on improving dairy industry

UK Prime Minister David Cameron has announced that the government will spend £5 million (AU$7.6 million) on a program to improve competitiveness for dairy farmers.

The funding is part of the UK Government’s Rural Economy Scheme, and the announcement came on the same day as dairy farmers across the UK gathered at a summit in London, calling on  processors to reverse a reduction in farmgate milk prices.

The Department for Environment & Rural Affairs (Defra) will hear bids for funding in the coming months, but have not revealed exactly what they will be looking for.

"We are looking for high-quality bids from the dairy industry to help unlock growth through game-changing investments," a Defra statement said.

"The dairy grant funding is to help producers to increase their competitiveness and added value.

“The details regarding what it is available for support, intervention rates etc are not yet available, but will need to meet current RDPE (Rural Development Programme for England) funding requirements.

The dairy farming industry has suffered similar problems as their Australian counterparts, as cuts to base prices impact farmers’ incomes and businesses.

Coles’ decision to slash milk prices to $1 per litre last year had huge flow-on effects for the industry, and farmers left the industry in droves.

Last month, the dairy industry announced that name-brand milk, which is slightly more expensive than the private label offerings, will now be permeate free.

The additive, which is much cheaper than whole milk, dilutes the milk and allows it to be sold cheaper, but as consumers become aware of the presence of permeate, they are looking for products without it.

The move by the dairy industry provides an obvious point-of-difference for consumers, which it hopes will result in more sales of the additive-free milk.

In May Dairy Australia received $1 million from the Federal Government to conduct research to assess energy efficiency on dairy farms nation-wide, but do you think the Australian dairy industry needs a similar scheme to the UK?

Image: The Guardian

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