Quick Facts: Dairy Subsidies

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Dairy cow at auction


England's dairy farmers receive around a third of their income in EU subsidies.

The EU also supports the prices of dairy products by paying processors to hold stock when wholesale prices drop.

The Common Agricultural Policy has shifted away from paying farmers for production as this caused massive oversupply in the past. Reforms introduced in 2003 mean that dairy payments are now independent of production.

The range of EU measures available to intervene in the market has fallen sharply and there is now a greater emphasis on environmental schemes (see upcoming historical summary).

 


This is part of the "Dairy Crisis: Reporting Essentials" series. See the right hand side column for upcoming items.


What subsidies do dairy farmers receive?

Basic Payment Scheme (formerly the Single Payment Scheme) - Put simply, these are payments made to active farmers based on the amount of farming land they have. They are contingent on farmers maintaining the land and complying with environmental, public health and animal welfare requirements. These payments account for the bulk of subsidies according to an EU summary of the CAP (at p. 4).

 
Agri-environmental Schemes -  these are payments made to farmers who take environmental measures that are additional to their legal requirements.

 

Average Dairy Farm Income 2013/14        England       £87,809 Farm Business Survey Data Builder
Average Single Payment Scheme Received 2013/14 England £24,753 Farm Business Survey Data Builder
Average Agri-environmental Payment 2013/14 England 4,562 Farm Business Survey Data Builder

 


What other support do they get?

The CAP has a range of market support measures for dairy farmers. The ones that are currently active are:

Milk Quotas
- To cope with overproduction that threatened to overwhelm the CAP budget, the EU limited the amount of milk each country could produce in 1984. This national quota is sub-divided among farmers. If it's exceeded the country is hit with a superlevy which is paid by the farmers that contributed to the excess. Milk quotas expire in April 2015. 

Wholesale Milk Deliveries UK 2013/14 13 651 million litres Rural Payments Agency: Milk Production Figures at p. 4
Milk Quota UK 2013/14 15 293 million litres Rural Payments Agency: Milk Production Figures at p. 4

 

Private Storage Aid - The EU stabilises butter and skimmed milk prices by paying processors to hold stocks when prices dip below set levels. Once the prices recover stocks of these goods are released slowly back into the market. This scheme re-opened in September 2014 and will remain open till September of this year.

 
School Milk Scheme - Preschools as well as primary and secondary schools can claim subsidies if they supply their pupils with dairy products. This scheme is jointly funded by the EU and the UK government. 

Amount received by UK schools in milk subsidies
UK 2011/12 8.16 million euros
DG Agri: Evaluation of EU School Milk Programme at page 47
Percentage funded by the EU 2011/12 68%
Amount funded by the UK 2011/12 32% See above
Children who used the subsidy as percentage of total children 2011/12 10% DG Agri: Evaluation of EU School Milk Programme at page 46

 

Import tariffs -  Though there are no barriers to trade within the EU, dairy produce coming from without are taxed. 

 


Note: this fact sheet does not yet comply with our editorial standards. It suffers from the following weaknesses:

1) It's not been double checked by a researcher.
2) It's not double sourced.


 

By Kunal Solanky

 

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