Written Evidence Submitted by the Cornwall and Isles of Scilly Local Enterprise Partnership

Written evidence submitted by The Cornwall and Isles of Scilly Local Enterprise Partnership (LEP) (DAS0006) About the Cornwall and Isles of Scilly Local Enterprise Partnership The Cornwall and Isles of Scilly Local Enterprise Partnership (LEP) was launched in May 2011. Private sector-led, it is a partnership between the private and public sectors and is driving the economic strategy for the area, determining local priorities and undertaking activities to drive growth and the creation of local jobs. The LEP is business-driven and our board includes 15 appointed representatives of the private sector, 3 nominated Cornwall Council representatives and 1 nominated representative from the Council of the Isles of Scilly. Our mission is that by 2030, Cornwall and Isles of Scilly will be the place where businesses thrive, and people enjoy an outstanding quality of life. We aim to facilitate sustained growth through long term, joined up investment in our People, our Places and through our Businesses. Find out more about our Vision 2030 here. The Agri-food sector is extremely important to the economy of Cornwall and the Isles of Scilly with it representing almost 6% of GVA (UK figure is 3%). 80% of our land mass is managed; the majority of which is farmed, but increasingly by a fewer number of farmers. Our climatic advantage (longer growing seasons, lower prevalence of winter frosts and high rainfall levels) provides the ideal environment for grass/livestock production and high-value horticultural crops. The largest agricultural sector (in financial value and land use) is dairy farming with approximately 400 farms supplying 4 main buyers of milk (Saputo Dairy UK, Arla, Trewithen Dairy and Rodda’s). The majority of the milk is processed in Cornwall into cheese (e.g. Cornish Yarg, Cornish Kern, Cornish Blue, Davidstow and Cathedral City Cheddar), functional food ingredients (e.g. demineralised whey powder and GOS), liquid milk, clotted cream and Ice Cream. Our response to the EFRA select committee response for evidence is as follows: - 1. How has the pandemic affected the dairy industry and dairy farmers, and why did it need extra support compared to other agricultural sectors? As businesses dairy farms have been impacted in many similar ways to any other business in a rural area. However, in addition to the generic impact dairy farming (and livestock farmers generally) is a 365/24/7 operation and as the output from it is a fresh and perishable product, they face additional challenges when there is an immediate and short-term shock in the supply chain. Live animals require feeding and management every day and so dairy farms have regular and on-going fixed costs that cannot be changed quickly which do make them different to many other businesses. The Covid 19 pandemic caused an immediate, and in some cases catastrophic, reduction in sales of milk to processors in both the short and medium term. Those farmers who supply processors who predominantly supply the food service and hospitality sector were affected more than most with many having to dispose of their daily production volumes rather than have it collected by their processor. Many suppliers liken the start of lock down to a “light switch” moment in terms of demand for their product reducing. Unlike other livestock sectors the milk produced on farm could not be kept for a few weeks until the market for their products re-opened so that is why the dairy sector needed the extra support. In terms of the impact on the dairy sector it can broadly be divided into 3 main areas: - The direct impact of loss of sales of liquid milk as a result of lockdown. For the most part this affected those dairy farmers who supply processors who in turn supply liquid milk to the hospitality and food service sectors. As these processors saw their sales reduce significantly overnight this had a knock-on effect to the dairy farmers that supplied them. In Cornwall the vast majority of farmers were not affected by this immediate shock as their processors supplied other markets. However, we are aware of a limited number who were significantly impacted and any changes to the milk price in one area of the market does often have a knock- on impact to other areas as well. The direct impact on staff involved in dairy farming. Running a dairy farm is a 24/7/365 operation so pausing production and furloughing all staff was not an option. If an outbreak occurred on farm this could also have significant implications as the animals would need to be fed and cared for daily. Like many businesses dairy farmers had to consider their duty of care to their staff and adapt their practices to safeguard all those involved. The average age of farmers would also be an additional risk factor. Therefore, dairy farmers in Cornwall faced the same challenges as every other dairy farm in this regard. The direct impact of the supply chain with many input suppliers unable to deliver some goods/services to farms during the lockdown phase. Dairy farmers in Cornwall faced the same challenges as every other dairy farm in this regard. 2. What impact have the other Government actions to support the industry, for example the relaxation of competition law announced in April, and the Intervention and Private Storage Agreement schemes administered by the RPA had? We defer to the NFU position on this question 3. Whether the Dairy Response Fund is a proportionate and fair response to the issues faced by dairy farmers? Are there specific weakness in its design, and if so how could they be addressed? Whilst we are grateful that the fund is available to support affected dairy farmers, we do believe there are a number of aspects of the scheme that render it not entirely fit for purpose, limiting the scope of the scheme. This is obviously very disappointing, largely since the fund guidance handbook denotes that the fund is designed to support those hardest affected by Covid-19 implications, but unfortunately due to the format of the fund detail, many fall out of scope. To improve the DRF, we suggest that it should be based on loss of income, compared to loss of milk price (in pence per litre reduction). This is far simpler and would enable the scheme to be accessible to the most severely affected producers who are currently ineligible for the fund. It was disappointing and as yet, fully unjustified to see the U-turn made from income to pence per litre loss, from the original DRF press release. Many farmers also fall out of scope as their milk price was not cut until May, and as milk price must be over the 25% loss threshold for April to be eligible for May, this excludes a wide range of producers. Therefore, the requirement for April losses being lifted would markedly improve the fund scope, to help a greater number of affected farmers. We are also disappointed to see that uncollected milk is not included in the scheme – as it is in the Welsh equivalent of the scheme. Given the media coverage of the dairy farmers throwing away milk, it would seem perverse that a Defra scheme would exclude those who garnered so much support from the nation for their plight. By amending the calculation to include milk disposed of, it would widen the scope of the scheme. It is also a great shame to see non-bovine (sheep and goats) and buffalo dairy producers not included in the scheme, (again, which are included in the Welsh scheme). Adding these producers into the dairy scheme would be of a limited liability to HMT (there are so few of them) but many of these producers have faced significant losses of income through total loss of market and this leaves a sector that previously had considerable export opportunity in a dire situation going forward. David Rodda MBE Economic Growth Manager Cornwall Council 30th April 2020.

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