Hard-pressed UK dairy farmers will receive a one-off support payment to help with their cash-flow problems stemming from the current low prices for milk and other produce, the Environment Secretary Elizabeth Truss announced today.

In England, dairy farmers will share £15.5 million in recognition of the prolonged period of low prices in this particular farming sector. In England this will be a payment based on milk production, meaning that each farmer will receive on average £1,800.

Ministers in Scotland, Northern Ireland and Wales have flexibility about how they wish to use their allocations to support farmers. Northern Ireland has been given a boosted allocation – worth £5.1 million – in recognition that Northern Irish farmers have been suffering from some of the lowest prices across Europe.

The UK’s overall direct aid package is worth £26.2 million, the third largest of all the member states.

Environment Secretary Elizabeth Truss said:

• We recognise that many dairy farmers are suffering financial difficulty at the moment and the support announced today will offer some relief.

• Dairy farmers are a vital part of our £100 billion food and farming industry. I want to support the industry to become more resilient and ready to take advantage of the growing demand for British dairy both at home and overseas.

• While it’s right that the immediate focus is on support for farmers’ cash-flow it is equally important that we help build for the long term. Developing a futures market will help farmers manage volatility and we are pleased that the Commission is taking this forward. We are also working with the Commission to look at ways of bringing greater fairness and transparency to the supply chain, using the success of our Groceries Code Adjudicator as a model that could benefit the whole of Europe.

Defra is also pursuing a host of measures to improve the long-term stability of the dairy industry and help farming businesses grow and thrive. They include:

• Working with the food industry – including supermarkets, retailers, manufacturers and caterers – on more consistent labelling and branding of British dairy products, improving transparency across the supply chain and allocating more space on shop shelves. This will make it easier for consumers and food businesses to know when they are buying British dairy products.

• An urgent industry-led review of best practice in the dairy supply chain facilitated by the Agriculture and Horticulture Development Board.

• A commitment to publish details of central government catering contracts, including their renewal dates, to bring transparency to the market and allow dairy farmers the opportunity to prepare and compete for contracts.

• The Environment Secretary will lead a trade delegation to China in November including eight British dairy businesses to promote quality British products to this growing market. This visit is part of Defra’s commitment to expand export market opportunities – which grew to a record £1.4 billion for dairy in 2014.

The full allocations are:

• England £15.5 million. The average payment will be £1,820 per farmer.
• Northern Ireland £5.1 million
• Wales £3.2 million
• Scotland £2.3 million

The payments in England will vary per farmer and be based on a flat rate per litre of milk production in 2014-15.

The Rural Payments Agency will administer these payments in December.