24 May 2000
50m cut for sheep premium

By Philip Clarke

SHEEP producers face another cut in their annual premium this year, far exceeding anything they may gain from stronger lamb prices.

Market managers in Brussels recently forecast an 8% rise in EU sheepmeat values, giving a predicted SAPS payment of just 11.18 a head for 2000.

This compares with a final payment of 13.58 last year, which represents a drop in support for the industry of 50 million.

But the NFU complains that calculating the premium in Euros, then converting back to Sterling, discriminates against the UK.

“Included in the commissions calculations is a forecast increase of 20% in Euro terms in the UK sheep price. But, in terms of Sterling, the rise is only around 5%,” said deputy president, Tim Bennett.

“British farmers then lose out again when EU payments are converted back into Sterling.”

Based on the commissions estimates, sheep producers will receive a first advance payment of 3.35 a head in July, plus another 97p in agrimoney compensation.

This compares with the 5.14 advance they received at the same time last year.

The effects of currency on sheep annual premium will feature strongly in a study prepared by the Scottish Agricultural College to be presented to the EU commission in early June.

This report will then be used by Brussels to decide if it needs to reform the sheep regime later in the year.