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Farmers Propose Taking Over Struggling Dairy as Industry Faces Decline

USA 25.06.2024
Source: The DairyNews
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Farmers are currently in negotiations with the States to potentially take over the management of the dairy industry, amidst concerns of its declining state. Mr. Bray, representing the farmers, expressed interest in exploring a cooperative model similar to successful frameworks in Jersey and the Isle of Man. He stated, "We have asked whether the farmers should run the dairy. It could be a cooperative where farms and dairy operations are integrated."
Farmers Propose Taking Over Struggling Dairy as Industry Faces Decline
Despite the enthusiasm, Mr. Bray acknowledged a significant hurdle: the lack of capital among farmers for a potential takeover, especially if the dairy requires substantial investment. "But if the dairy needs so much investment, its book value is practically worthless," he remarked, emphasizing the need for detailed discussions with the States about the future of the industry.

Since the dairy's management was transferred to the STSB in 2016, there has been little commercial success, with a projected loss of £200,000 for this year. Bray highlighted the urgency of the situation, noting that the industry is reportedly in a state of managed decline and the morale among farmers and dairy staff is low.

The review by the Environment & Infrastructure, which has been delayed for over a year, is expected to provide a new plan to rejuvenate the dairy industry. Originally due in February, the proposals are now anticipated by the end of the year.

The lack of clear direction and the prolonged wait for the review have exacerbated frustrations in the industry, which has seen a reduction in the number of farmers from 18 to 11 over the past decade. The need for significant investment in a new dairy facility, previously suggested by the States as a cost-saving measure, has yet to materialize, placing further strain on the sector.

Deputy Roffey expressed a sentiment that the dairy is less a business and more a critical component for maintaining Guernsey’s countryside, implying that it is not expected to turn a significant profit under its current model. He also criticized past government savings initiatives that reduced support to farmers, which he believes have indirectly increased consumer prices for dairy products.
July 2024
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