THE Chancellor sent a message of support to struggling dairy farmers faced with plunging milk prices during his visit to Grassington.

George Osborne stressed he could not fix prices but he could call on banks and the taxman to help milk and dairy producers.

His attention had been drawn by Skipton MP Julian Smith to the plight of dairy farmers Paul and Janet Bolland, of Malhamdale, who had recently invested £700,000 in their milk parlours.

Mr Osborne said he was in favour of short-term measures to give farmers more time to pay income tax.

"In the longer term, there is a better future for British agriculture and dairy products in that there are markets abroad that want British milk products which should lead to a long and secure future for the industry," he said.

Mr Smith, who joined Mr Osborne at the Yorkshire Dales National Park Centre in Grassington, said the issue was a major one throughout the UK but it was particularly acute in North Yorkshire.

He said since 2002 it had lost 489 farmers, which was the second-worst loss in the country. Even farmers who were doing their best to invest in and build their businesses were struggling.

Mr Smith said he wanted to see "greater teeth" for the Groceries Code Adjudicator in its role as arbitrator between suppliers and supermarkets.

"And there are some short-term measures that I would like to see from the Treasury. HMRC could really help farmers with their monthly payments, perhaps by allowing some pooling of profits over several years rather than working on an annual basis," he added.