A BANK has pledged its support to farmers who have missed out on milk payments after a dairy business went into receivership.

When milk co-operative Dairy Farmers of Britain (DFB) ran into trouble last week, it emerged that its suppliers, including 288 farms in the North-East and North Yorkshire, would not be paid for last month’s deliveries.

Lyndon Edwards, chairman of the Royal Association of British Dairy Farmers (RABDF), asked for banks to be “lenient on DFB members at this difficult time”.

Barclays Bank last night launched a financial support package for its farm customers.

Tim Seeley, head of agriculture at Barclays, said the bank was aware farmers’ profit and cash flow would be “significantly” affected by having to write off all milk delivered from May 1 until receivers PricewaterhouseCoopers (PWC) took over the running of the business last Wednesday.

The support package includes repayment holidays on existing and new loans and extension of overdraft facilities, where appropriate.

The bank said it hoped the measures would provide breathing space farmers needed to deal with both the immediate and any potential longer-term impact.

Mr Seeley said: “We appreciate that this will be a worrying time for those supplying Dairy Farmers of Britain.

“We are currently speaking to all affected customers to reassure them that we will do our utmost to provide them with the tangible support they need to help to keep them in business.”

PWC’s intention is to continue trading and collect and distribute as much of DFB members’ milk as possible, as it attempts to find a buyer for the business.

Mr Seeley added: “It is reassuring to hear that the DFB will continue to trade and farmers can now expect payment for milk collected after 3pm on June 3.

“Milk production in the UK is at historically low levels and most processors are keen to secure additional supplies.

“It is likely therefore that, if it does become necessary, most farmers will be able to find an alternative buyer for their milk.”

Last night, RABDF chief executive Nick Everington said: “We welcome the move announced by Barclays Bank.

“We believe that it’s important for all banks to be lenient on DFB’s 1,800 producers in order to maintain the British dairy industry’s critical mass.”

DFB, which also runs a dairy in Blaydon, Gateshead, employing 250 people, ran into trouble last year, suffering losses in its liquids division which led to it announcing the closure of two dairies, in Fole, Staffordshire, and Portsmouth, in November.

It was hoped that the move would return the division to profit, but it has since lost a contract to supply the Co-operative supermarket chain. It also lost members when its milk price became uncompetitive.

Last night, 250 jobs looked set to be safeguarded after the sale of two major DFB cheese plants – Llandyrnog Creamery, in Wales, to Milk Link, and Lubborn Cheese to Lactalis McLelland. Both companies are also hoping to retain DFB milk suppliers.

The two cheese plants were not placed into receivership with the wider DFB group in order to allow sales negotiations to continue.