Question to the Department for Environment, Food and Rural Affairs:

To ask the Secretary of State for Environment, Food and Rural Affairs, whether he plans to introduce an additional grant scheme for people working in the agricultural sector that are facing market disruption as a result of the covid-19 outbreak.

The Government is aware that coronavirus represents a very significant challenge, affecting daily life and every part of the economy. The agricultural sector plays a vital role in maintaining the UK’s food security. We are working closely alongside the agricultural industry to ensure that we understand and manage the impacts to the industry.

The department 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 HMG backed Coronavirus Business Interruption Loan (CBIL), 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 BEIS to introduce new measures to support businesses in the food sector 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 due to 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 due to 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 on-going campaign led by AHDB and retailers to promote the consumption of beef products.

While the Government has made a wide-ranging package of measures available to businesses to support them through this difficult period, we continue to keep the situation in each sector under review. Legal powers were included in the COVID-19 Bill enabling us to offer further financial support if we believe it is necessary.