Dairy farmers have called for more States funding, despite a proposal to more than double the current subsidy.
The Guernsey Farmers Association (GFA) welcomed the proposal to increase land payments from about £1m to £2.35m by 2026, but said it was £300,000 below the 2014 subsidy if it had risen in line with inflation.
GFA president Michael Bray said the increase would go some way to “right a wrong” but lower milk sales as well as higher fuel, feed and fertiliser costs meant farmers were “suffering”.
Deputy Lindsay de Sausmarez, Environment and Infrastructure President, said if passed the rise would help the sector “back on a more stable footing”.
The association, which represents the island’s 11 dairy farms, said payments decreased from about £2m in 2014 to their current level by 2019.
It said this followed the States switch to a consumer-pays model, which had seen the cost of a carton of milk steadily rise.
Mr Bray said the current situation “clearly [could] not continue without a collapse of the island’s dairy”.
He argued the rising cost of milk had also contributed to a “significant drop in retail sales”.
Price drop unlikely
He said the price of milk had increased by more than 35p a litre in recent years, while the island’s farms now produced 700,000 fewer litres of milk a year.
Mr Bray said if farmers were to get the increased subsidy his organisation was calling for he expected milk prices to “stabilise”, reducing the need for further price rises for consumers.
However, he said it was unlikely the price of milk would fall.
“Whilst this has improved dairy finances with the dairy retaining 24p of the 36 pence per litre increase on liquid milk – the same cannot be said for dairy farm incomes,” he said.
Farmer Josh Dorey, who manages the island’s largest dairy herd, said was hopeful the extra funding would offer his business a more “sustainable future”.
“And hopefully there is less of an impact on the consumer,” he said.
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