Tuesday 02 August 2022
The Committee for the Environment & Infrastructure and the Policy & Resources Committee have agreed to provide emergency support to Guernsey's dairy farming industry. The industry faces a crisis which, if unaddressed, could see some of the few remaining farms forced out of business and the sector as a whole become unviable.
While many individuals and businesses are experiencing significant cost increases, dairy farmers' costs are rising by more than those in other areas, as feed and fertiliser in particular exceed the inflation seen on other products. 'Agri-inflation' has increased to around 38% compared to the headline RPIX rate which in Guernsey is 7%.
Coupled with a very hot and dry summer, farmers have also had to begin using winter feed reserves much earlier in the season. The combined impact means some of the remaining 12 farms still operating in Guernsey are on the verge of having to close permanently. The industry has taken steps to try to mitigate the cost increases, such as importing feeds as a group rather than as individual businesses, but still some farms are currently operating at a significant deficit.
With few farms now working with the Guernsey breed and responsible for maintaining large portions of the Island's agricultural land (1,260 hectares in total), the loss of this industry would have long-lasting repercussions beyond that of the individual farms and their employees.
Therefore, in order to ensure the industry is not lost, the Committees have agreed emergency funding of £486,000 from the Budget Reserve. This funding is intended to help the industry survive this current period of very high feed and fertiliser costs, which are caused in large part by the ongoing war in Ukraine and which it is hoped will begin to come down in the coming months. But the Committees are also aware that more needs to be done to secure the sector's long-term sustainability, and they have agreed to carry out a review to look at how this can be achieved.
Deputy Lindsay de Sausmarez, President of the Committee for the Environment & Infrastructure said:
"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 said:
"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."