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<p>Defra is working very closely with both farmer and processor representatives through
this period of disruption to manage the impact on the dairy supply chain of Covid-19.
Farmers supplying milk to processors that sell into the food service sector have seen
a significant reduction in demand and we have taken several steps to support those
affected.</p><p>This includes by temporarily setting aside some elements of competition
law to enable farmers and the wider dairy sector to work together to minimise milk
being wasted and to ensure it is processed into longer life dairy products. This approach
will allow the market for milk to adjust to the change in demand for milk while allowing
production to be restored when shops, restaurants and pubs are able to open again.</p><p>The
Government's Covid-19 Business Interruption Loans scheme is available to the dairy
industry to support them in this difficult period. I urge those farm businesses for
whom it is appropriate to consider accessing these loans. Defra has held urgent discussions
with the major banks to ensure they understand that farmers, milk buyers and milk
processors are eligible for this scheme and we are working to increase awareness across
the dairy industry. HMT have also now announced the new Bounce Back Loan scheme which
will apply to businesses operating in agriculture. This will ensure that the smallest
businesses can access up to £50,000 loans. The government will provide lenders with
a 100% guarantee on each loan, to give lenders the confidence they need to support
the smallest businesses in the country. We will also cover the first 12 months of
interest payments and fees charged to the business by the lender.</p><p>The Government
also took a number of early emergency steps to support dairy farmers and the wider
sector. These included designating employees in the food sector as key workers and
temporarily relaxing the normal rules on drivers' hours, enabling the sector to keep
supply chains running, including deliveries from farm gate to processors.</p>
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