Struggling tenant dairy farmers on the Isle of Bute have been handed a lifeline by their landlord to help ensure the survival of dairying on the island.
The Mount Stuart Trust, which manages Bute Estate, has pledged to give dairy tenants a rent holiday for the next agricultural half year, which runs between May and November, if their milk price does not significantly improve.
They will also be offered financial assistance, which the trust hopes will support the whole dairy sector on the island.
Producers on Bute supply struggling dairy co-operative First Milk, which has been at the centre of the current dairy sector crisis.
In January the Glasgow-headquartered co-op was forced to delay payments to farmers after revealing it was suffering from cash-flow problems. It also asked members to increase their capital payments into the co-operative to keep it afloat.
On April 1, its suppliers will be put on a new AB formula contract which will result in another price cut for farmers.
The A price will be set at 20.87p a litre for the manufacturing pool and 20.5p a litre for the balancing pool.
While, the B price is expected to range between 16p and 18p a litre.
According to the Mount Stuart Trust, the new contract will result in dairy tenants being paid a price which is half what it was a year ago and back to levels not seen since the early 1980s.
“The trust’s primary objective is to ensure that dairy farming continues on the island into the future in the interests of the trust, all of the island’s farms, and the island economy as a whole,” said Bute Estate factor Bob Baines.
“After the end of May, no rent will be payable until the same time next year by our dairy farms. Immediate financial assistance is also available now for dairy businesses, subject to conditions, irrespective of the proposed cancelled rent payment.”
He said the trust had limited funds, but was prepared to offer dairy farmers financial assistance because it believed dairy farming was integral to the trust and the island’s agricultural industry.
“We want to maintain the current level of production for as long as possible and buy time for the milk market to recover so we have the best chance of retaining dairying on the island for the future,” added Mr Baines.
“As a result, we will target whatever resource we can make available to where we believe it will be most effective in helping the sector ride out the current crisis.”
NFU Scotland’s milk committee chairman, Graeme Kilpatrick, welcomed the move by Bute Estate but warned its tenant farmers would be concerned about paying their rent in May.
“We hope that Bute Estate will be understanding of the difficulties during what will be a real pinch point for many of the islands producer who, given the current situation, are focusing on the coming weeks. I hope that Bute Estate and farmers maintain an open discussion about the situation and how further support can be prioritised,” he added.
In January the Press and Journal launched a campaign to help struggling dairy farmers. The campaign, which has been backed by local producers, calls on members of the public to buy more British and Scottish dairy produce.