Banks must step in to help dairy farmers hit by the collapse of the Dairy Farmers of Britain (DFB) milk co-operative, says local AM Angela Burns.

Carmarthen West and South Pembrokeshire AM Mrs Burns has already heard from a number of farmers concerned about their future.

“Dairy farmers are undoubtedly facing a very tough time at the moment,” she said.

The co-operative has 1,800 members across Great Britain and employs another 2,200 people in its factories.

Now it has gone into receivership, it is estimated that the average DFB member will lose around £14,000 for their May and early June milk – amounting to around £21m in total – in addition to an average farmer investment of around £25,000 which has already been lost.

In another sign of a rising crisis in the dairy industry, farmers demonstrated outside the Saputo dairy in Newcastle Emlyn last week to protest at low milk prices.

Mrs Burns added: “I have already been inundated with calls from farmers who are worried about not getting paid by DFB or who are facing reduced circumstances with milk prices being so low.”

“The banks have got to show some empathy and extend favourable terms; we are talking about people’s livelihoods and homes here.”

Farmers’ Union of Wales milk committee chairman and DFB member Eifion Huws also demanded banks show the same goodwill as the Government showed them during the credit crunch.

Mr Huws said: “I believe they should think very long and hard about how to help members by offering interest free loans, for example.

“After all, the loss of a much-needed milk cheque is a huge blow to all our cashflows.”

The receivers Price Waterhouse Coopers hope to be able to collect and distribute the vast majority of DFB milk while they attempt to seek a sale of the businesses.

NFU Cymru president Dai Davies, a dairy farmer from Carmarthenshire, said his priority was to help members through this difficult time.

“I have agreed a system for immediate support including guidance for members, including those looking to supply their milk to another processor, and we will be talking to the receivers, Dairy Farmers of Britain, and other dairies, to see what can be done to help those affected.”

Rural Affairs Minister Elin Jones said she was discussing the implications of the news with the company, the administrators and representatives of the sector.

She said: “I am encouraged by optimism within the sector around the possibility of potential buyers for the more efficient sites which will include those in Llandyrnog and Bridgend, and the Welsh Assembly Government will work with the administrators to find new buyers for the sites .