Government will provide $11 billion loan to dairy farmers to prevent milk shortages.
Dairy Farmers; The U.S. government announced the first step in the response to the ongoing shortage of dairy products. They are planning to issue $1 billion loans to dairy farmers to enable them to produce enough milk.
The American Farm Bureau Federation says they expect dairy producers to use the money to increase production, adding 1.5 million new cows to the nation’s herds.
It was estimated that the shortage of milk has cost Americans and Canadians over $1 billion.
Some dairy companies have resorted to importing milk from other countries to meet domestic demand.
Milk production hit a high point in the 1980s, but the industry has been struggling since a bad drought two years ago affected the supply of cattle feed.
The government also says that the dairy industry could lose up to 2 million jobs.
Government says it is providing $10.5 billion in direct payments to farmers and $1.5 billion in other payments.
In addition, the Department of Agriculture is working with the United States Agency for International Development to provide financial and technical assistance to countries that export dairy products to the U.S.
The U.S. is the largest importer of milk and dairy products in the world.
Are you getting irritated with the lack of milk in the market and you are wondering why is this happening? There are various reasons behind the shortage of milk and it is because of the demand being high and supply not meeting up to the demand.
Government has launched a program for dairy farmers who want to increase their milk production. In this program they are provided with a loan of up to $11 billion to increase the production and get enough supply for the customers.
The program was started on the advice of the government of New Zealand where dairy farmers were struggling with milk shortage. The same thing is happening in Australia and Canada as well.
According to the government of New Zealand, the main reason behind the shortage of milk in Australia and Canada is the increase in the milk demand, which is increasing at a high rate.
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In the current scenario it has been seen that the demand for the milk is high because of the increase in the population and also the rise in the demand of cheese and butter in Australia and Canada. The dairy industry in Australia and Canada is experiencing a boom and thus the demand for milk is growing.
The program for dairy farmers is called ‘Milk for Schools’, which is an agreement between the dairy farmers and the government. Under this program, the government will provide loans of up to $11 billion to the dairy farmers to improve the quantity of milk produced by them.
The money that is going to be used for this program will come from the budget allocation made to the Ministry of Primary Industry. This is going to happen in the form of subsidy to the farmers who want to buy the equipment to produce more milk.
The government of New Zealand has also given a chance to the dairy farmers to apply for the loan. A loan guarantee scheme has also been introduced under which if a farmer fails to repay the loan then the government will bail him out.
There are more than 13,000 dairy farms that have applied for the loan. According to the Ministry of Primary Industry, the number of dairy farms is expected to grow to 30,000 by 2025.
There are many farmers who are struggling to repay the debt that they have taken to expand their business, and hence the scheme is a great way to help them.
Conclusion:
In conclusion, the program is a great way to help the dairy farmers to increase their milk production and thus they will be able to meet the rising demands. So, I would advise the dairy farmers to apply for this program as it will help them to increase the amount of milk and milk products.