The EU has allocated £26 million from the £273 million EU Dairy Fund for dairy farmers in Britain and Northern Ireland. The fund is intended to help dairy farmers who have been severely affected by changes in demand and prices over the last year.
Following consultation with the industry, Defra and the Scottish, Welsh and Stormont administrations have agreed to distribute their share of the fund by making a flat rate payment to dairy farmers of 0.2 pence per litre of the milk they produced between October 2008 and September 2009. To keep administrative costs as low as possible, the qualifying threshold for payments will be 50,000 litres. The local share of the fund is expected to total in the region of £3.8 million.
In announcing the decision Minister Gildernew said that the EU Dairy Fund is a good boost for local dairy farmers, particularly in the current economic climate, with Northern Ireland's allocation totalling around £3.8 million.
She added: "Dairy farmers make a very important contribution to both the local economy and rural areas but have suffered low prices for milk during most of last year.
"Following consultation with the industry I have agreed with their view that a flat rate payment per litre of production is the fairest way to allocate this money. My aim throughout this process has been to ensure that dairy farmers would benefit from this funding as soon as possible. We are making good progress and I understand that the Rural Payments Agency aims to start making payment from mid-April."
The Minister continued: "To facilitate this, I would urge those producers who receive a request for information from the Rural Payments Agency to respond promptly. This fund provides some very welcome financial assistance at a difficult time for the local dairy sector and will also help the industry to remain competitive."
It is envisaged that the Rural Payments Agency will make the payments by the end of June.
Meanwhile, the Ulster Farmers' Union has welcomed the release of Northern Ireland's share of additional EU funding for the dairy sector. Deputy President John Thompson said the package was aimed at assisting all European dairy farmers who suffered with low farmgate milk prices and rising costs of production. He also said the funding would go a small way to recouping the losses which dairy producers had endured when milk prices crashed, particularly during 2009.
Mr Thompson added: "I am pleased that the Minister has listened to the consultation process and has made a decision which fairly allocates the funding across all producers."
UFU Dairy Policy Chairman William Cromie pointed out that when the Union called for the release of the Emergency Fund in December, it was stressed that not only should the fund be allocated to active farmers based on production, but it should be done with the minimum of administrative burden.
He added: "As far as October 2008 to September 2009 is concerned, the UFU endorses this reference period as this was the period when milk producers were hit hardest by rock-bottom milk prices.
"The payment will be made through the Rural Payments Agency before the end of June and the UFU is calling on the Agency to ensure that the payments are made as quickly and efficiently as possible."
Farmers for Action spokesman William Taylor has also welcomed the Minister's announcement but also pointed out that it was too little.
"All additional monies for the milk sector represent a good news story for the industry at this time. The reality, however, is that a significant number of dairy farmers will have given up milk production by the time the money is paid out."
DUP Agriculture Spokesman Ian Paisley Jnr, who is Chairman of the Assembly's Agriculture Committee said that the decision to allocate the fund across the UK on a flat rate basis per litre of production was the fairest method.
Mr Paisley said: "The announcement that dairy farmers in Northern Ireland will benefit from £3.8 million as a result of the EU Dairy Fund is a welcome boost for the industry. My colleague Diane Dodds MEP has been lobbying extensively in Brussels on this issue and I have worked closely with her in those endeavours.
"The decision by DEFRA and the devolved administrations across the United Kingdom to implement a flat-rate payment per litre of milk produced is also to be welcomed. We believe this is the fairest allocation method for the funds and this was the message which came forward from industry representatives also.
"Dairy farmers have been forced to ensure some incredibly difficult times recently with prices well below the cost of production. Farmers will be looking forward now to seeing this money actually coming onto the ground and I hope that the Rural Payments Agency will meet their target of beginning to make the payments from mid-April," Mr Paisley added.