Guernsey’s dairy farmers granted emergency funding to tackle agflation

By Teodora Lyubomirova contact

- Last updated on GMT

GettyImages/pelvidge
GettyImages/pelvidge

Related tags: Dairy farming, Dairy farmers, UK & Ireland

The Island’s dairy sector has been operating ‘at a significant loss’ for months and was on the brink of collapse.

Guernsey dairy farmers will receive a one-off emergency grant to help offset rising costs that threaten the viability of the Island’s whole industry.

There are 12 dairy farms still operating on the Island, which prides itself on its agricultural heritage and its famous Guernsey breed.

The Committee for the Environment & Infrastructure and the Policy & Resources Committee will provide £486,000 from the budget reserve to aid farmers financially during the current period of above-inflation feed and fertilizer costs.

DairyReporter understands that the funding will be allocated based on headage numbers, with a lump sum paid in early August. A review into the sector’s long-term sustainability will also be carried out.

Michael Bray, president of the Guernsey Farmers Association, commented: “We are extremely grateful to the States of Guernsey in providing the funding and the recognition of the importance of the industry to the Island.

“The amount of funding provided will not turn around the financial situation of farms and farming on the Island but it will allow time for a bigger review of the financial and industry situation to take place. It is expected when the farm accounts are audited by the Dairy Group that farms will have broken even or made a minimal loss, with the focus on rebuilding and improving the industry for the longer term in 2023.”

‘A dire situation’

Bray told DairyReporter that farms had been running ‘at a significant loss’ for months, with costs increasing in late 2021 and then again over the last few months, particularly the cost of purchased feed.

To counter the price hikes, farms had resorted to personal finances. “But this has left farm finances in a dire situation,” ​he warned, “such that from August onwards, there was a very imminent danger of farms going out of business.”

According to data released by the Committees, agricultural inflation increased to around 38% compared to the headline RPIX rate which in Guernsey is 7%, with feed and fertilizer in particular exceeding the inflation seen on other products. Due to the hot and dry summer in the UK, farmers had also resorted to using winter feed reserves much earlier in the season.

'We cannot stand by'

But the potential loss of the industry would have ‘long-lasting repercussions beyond that of the individual farms and their employees’, the Committees said in a statement.

Deputy Lindsay de Sausmarez, president of the Committee for the Environment & Infrastructure, commented: “We're at a critical point for dairy farmers and we face a real risk of losing more farms, to the point that the sector as a whole may never recover and if we don't act, we could very quickly see the end of dairy farming in Guernsey. That is no exaggeration.

“Dairy farming has a unique place in Guernsey's identity and culture, our famous Guernsey breed is iconic, and our beautiful countryside is what it is because of this industry. Losing it would have very far-reaching consequences.”

Deputy Peter Ferbrache, president of the Policy & Resources Committee, added: "We must look at how we make the dairy farming sector as sustainable as possible, balancing farmers' costs with keeping the price of our milk, which is a much-loved high-quality product as well as a household staple, at least reasonably affordable for Islanders.

“But the situation right now has quickly become very urgent as international developments have sent farmers' costs soaring which means the industry cannot afford to wait for that kind of review to be completed, they're on the brink right now. We cannot stand by and let such a special part of our Guernsey identity disappear because if we do it will almost certainly be lost forever.”

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