Act on Suckler Cow Premium scheme changes fgfgfgfgfgfg
EVERY beef farmer needs to calculate how to adapt to changes to the Suckler Cow Premium scheme.
Peter Cook, head of SACs rural business unit, told 200 farmers at the beef conference in Inverness that the EUs crisis management moves to ease the BSE-related collapse in beef demand in mainland Europe made planning even more important.
"The EU allows up to 20% of SCP claims at the moment to be made on heifers," he said. "And from 2002 that will be extended to allow a maximum claim of up to 40%."
Although those ceilings were voluntary, from 2003 a mandatory 5% of claims would have to be on heifers, while from 2004 that would rise to 15%.
"Every farmer needs to work out if they are going to stick with their existing quota and include heifers in that, or if is worthwhile going out and buying more quota."
Mr Cook ran through the figures for a farm with 150 units of suckler cow quota which does not qualify for extensification payments.
"This place carries 155 cows and produces 70 heifers/year. The proposal is to claim on all the heifers and all the cows, so is it worthwhile buying another 70 units of quota, meaning that 32% of the total claim was for heifers?"
At £300/quota unit, the farmer would have to spend £21,000 to do this. "If he takes a loan over four years, the repayment is going to be about £6300/year. But 70 SCP claims at £142/head yields the farmer £9940/year.
"On this particular unit, there would be a net gain of £3640/year and the loan is paid off in four years," Mr Cook said.
But every farm is different. "Build in extensification payments to your calculations if they apply. And also make sure you know all the rules relating to this heifer claim, such as the fact that you must keep them for six months after the claim is made." *