TFA: Banks Should Support UK Dairy Collapse

UK - The Tenant Farmers Association is calling on all major banks to support dairy farmers affected by the collapse of Dairy Farmers of Britain by granting free overdraft extensions.
calendar icon 11 June 2009
clock icon 2 minute read

TFA Chief Executive George Dunn said "In light of the decision of Dairy Farmers of Britain to call in the receivers on 03 June, many farmer suppliers to the company face the loss of a considerable amount of money both through the loss of their equity in the business and the revenue associated with the milk they have supplied to the company during May and the first three days of June. The Receivers have made it abundantly clear that suppliers can expect to receive nothing in return for this milk. This will leave a considerable hole in the cash flow of many producers and, in particular, tenant farmers who have just had to pay their spring rent”.

“This is a severe blow for the industry and a significant crisis for the individual farmers affected. In view of this, the TFA has contacted the major banks and the British Bankers Association to ask that they extend overdrafts for clients affected by the collapse of Dairy Farmers of Britain and that these additional overdraft facilities are granted without arrangement fees and be free of interest for a period of 12 months,” said Mr Dunn.

“The banking sector has received considerable assistance from the public purse in recent months on the premise that it should be using this to support small businesses and therefore in the circumstances of the collapse of Dairy Farmers of Britain we very much hope that the banks will respond positively to this request,” said Mr Dunn.

The TFA is also concerned about the actions of some milk purchasers who are being contacted by the 1800 suppliers affected by the collapse of Dairy Farmers of Britain.

“I am pleased to report that in the main dairy companies are acting responsibly. However, I have been concerned to receive a significant minority of reports where there are concerns that some purchasers are taking advantage of the vulnerable position of producers and offering contract terms at very low prices. Whilst I should stress that this does appear to be only a minority of cases, it is my concern that all dairy companies should be acting responsibly. I have therefore asked Dairy UK to send this message to its members. If we continue to receive persistent reports from our members relating to individual companies we will seek to place this information in the public domain,” said Mr Dunn.

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