Farmers warn cost of milk in Guernsey could 'significantly' rise if financial support not continued

• Roisin Gauson has been to meet some of those calling for financial support to continue

Dairy farmers in Guernsey are warning that the cost of milk could rise to £2 per litre, unless the government agrees to continue providing financial support.

Farmers say the war in the Ukraine has resulted in costs more than doubling, as the price of feed, fuel and fertiliser soar. Grant payments are due to end in January, and farmers fear that without them, the industry could go under.

The President of Guernsey Farmers Association, Michael Bray, says he does not think any farmer on the island realised just how important the funding would be.

He said: "There wasn’t a single farmer that would have been making a profit, which is a really, really scary time because there’s a lot of investment that goes on in a farm.

"It takes two years from a calf to go from small calf to coming into the herd, and that’s a big investment that’s ongoing all the time and obviously there’s all the infrastructure that’s required as well, so without the finding we would have been in a real pickle.

"Going forward these prices haven’t come down, we’ve seen fertiliser come back by about £100 per tonne, but it’s still at least double what it was when we were buying it this time in 2021, so yes, it’s a major challenge still going forward."

In August, Guernsey's government agreed a half-million pound bailout to help ease the situation.

The last top-up payment is due in January, and farmers in the island say there is no indication as to what will happen next. In a statement the States of Guernsey said: "We’re very aware that the situation for farmers in the short-term remains very challenging, and we are actively discussing this with the industry and the Policy & Resources Committee, and we will comment further when we are able to do so.”

Julian Ogier, a farmer in Guernsey, diversified his business 12-years-ago, producing ice cream, and more recently pumpkins. He says he is thankful that he did. He said: "Well you can't say it was a bad year for ice cream this year, with our lovely summer we've had our ice cream has done quite well this year, so we're pleased with that.

"It gives you a bit of stability in your business when things were difficult with the cows, yes it was nice to have that as a back up, and we knew the pumpkins were coming along at the end of the season, so we'll certainly carry on with those things."

Those in the industry who focus on milk production say the the grant has helped keep them afloat while keeping the price of a pint stable.

Mr Bray says: "We're just waiting for a response back from P&R and we're really really hopeful that they can subsidise the milk price and keep it lower for the general public.

"Otherwise we're going to be looking at milk litres in the shop going up to about £2 per litre, which isn't great for the consumer, isn't great for us and isn't great for the dairy.

"The dairy group set the milk price, they look at our average farm profits and we just had a report back around a month ago that actually showed that 2021 accounts were a fifth of the average farm profit that we’d been running at previously, so we saw a massive, massive drop in farm profits in 2021. 

"2022 they budgeted for and without the Ukraine payment that we had and the extra subsidy money, it would have been a really, really dire situation across all farms on Guernsey."

A review into the sector's long-term stability is also ongoing and that report is expected to be finished early next year.