Dairy farmers are calling for increased government support despite a proposal to more than double the current subsidy. The plan would raise land payments from about £1 million to £2.35 million by 2026. However, farmers argue this still falls short of what they would have received if subsidies had risen with inflation since 2014, leaving them £300,000 behind.
Farmers are facing challenges from lower milk sales and rising costs for fuel, feed, and fertilizer. These pressures have created significant financial strain on the sector. The proposal to increase subsidies is seen as a step in the right direction, but many believe it does not go far enough to address the challenges threatening the sustainability of dairy farming on the island.
The association representing the island’s 11 dairy farms reported that subsidies decreased from about £2 million in 2014 to their current level by 2019. This reduction followed a shift to a consumer-pays model, which led to a steady rise in the price of milk. As a result, milk sales have declined significantly, with farms producing 700,000 fewer liters of milk annually than in previous years.
Farmers argue that the current situation is unsustainable and could lead to the collapse of the island’s dairy industry. The rising cost of milk has been a major factor contributing to reduced retail sales, creating a cycle of financial difficulty for both producers and consumers.
If the proposed subsidy increase is approved, farmers hope it will stabilize milk prices and reduce the need for further price hikes. However, they caution that it is unlikely milk prices will decrease. Stabilization would be an improvement, but the financial challenges faced by farmers remain significant.
The price of milk has increased by more than 35 pence per liter in recent years. While this has improved the financial position of the dairy, which retains 24 pence of the 36-pence-per-liter increase, dairy farm incomes have not seen a similar benefit. Farmers emphasize that their share of the revenue remains insufficient to cover rising costs and ensure long-term sustainability.
One farmer managing the island’s largest dairy herd expressed cautious optimism about the proposed funding increase. He hopes the additional support will provide his business with a more sustainable future and mitigate the financial burden on consumers. However, he acknowledged that more comprehensive measures might be necessary to fully address the challenges facing the industry.
The Environment and Infrastructure Committee has put forward the proposal to increase subsidies, with a vote scheduled for 19 February. If approved, the funding increase would aim to provide the sector with greater stability and help ensure the continuation of dairy farming on the island. However, farmers remain concerned about whether this measure alone will be enough to secure the industry’s future.
In the meantime, dairy farmers are advocating for further support to address the gap between the current subsidy levels and the rising costs of production. They believe additional measures are necessary to prevent further declines in milk production and ensure the viability of the island’s dairy industry for years to come.
