Anger as intervention changes threaten to hit cereal values
By Philip Clarke
TIGHTER standards for cereal intervention now seem certain, leading to less grain in EU stores and lower prices to growers.
The latest proposals are not as strict as those originally put on the table in Brussels, (Business, Jan 21), which sparked strong objections by several member states. But the commission has considerable powers to make adjustments and is poised to adopt the changes.
These will see the introduction of minimum protein content for wheat, starting at 10% for 2000/01, rising to 10.3% for 2001/02 and 10.5% for 2002/03. The full intervention price will only be paid on samples above 11.5% protein.
Hagberg will stay at 220, but minimum specific weight will rise from 72kg/hl to 73kg/hl. While this is less than the 75kg/hl originally proposed, the full intervention price will only be paid above 76kg/hl.
Standard moisture content is set to fall by 0.5% to 14%. Wetter grain will be penalised by k0.2/t (13p/t) for each 0.1% above this, up to a maximum 14.5%. Bonuses of k0.1/t (6.5p/t) will be paid for each 0.1% reduction in moisture content below 13.4%.
Farmer representatives on the Continent have reacted angrily to the changes. Brussels-based COPA estimates they will knock another 3% off the value of grain meeting the new minimum standard.
Cut in income
"Reinforcing the intervention criteria will lead to a cut in producer income, which will add to that following the implementation of Agenda 2000, and this in a difficult EU and international context," said a spokesman. "These measures not only challenge the decisions of the Berlin summit, but will penalise producers who have already carried out their sowings."
COPA and the NFU believe the issue should be dealt with by farm ministers as part of the price package, and not by the commission. The NFU is particularly dismayed that the commission also plans to retain the "dough machinability" test. "The majority of UK wheat will remain excluded from intervention because it fails to meet a particular bread-making requirement not used by any European miller," it says.
The tighter standards will not have a direct impact on the UK as wheat has struggled to make intervention since the criteria were last changed in 1992. But there will be an indirect effect, warns David Balderson of co-op Viking Cereals.
"If it makes it harder for French wheat to get into intervention, then that will mean more competition in the market and lower prices for our producers. We are getting this because the commission never got the 20% price cut it was after from the Agenda 2000 reforms, only 15%."
Barley will be directly affected by the changes, he adds, as this will be subject to the same tighter moisture standards. *