19 April 1996

Bid to beat BSE effects could harm IACS claim

By Philip Clarke

LIVESTOCK farmers adjusting their systems to try to mitigate the effects of the BSE crisis should give careful consideration to the impact on their IACS claims.

With less than a month to go to the May 15 deadline, mistakes now could lead to penalties later, or even disallowance of all aid cash, warns Francis Mordaunt of farm business consultants, Andersons.

In particular:

lThose considering ploughing up grass and sowing barley to claim area aid should remember the land must be eligible and that additional set-aside is needed. This must have been in place since Jan 15, so the farmer needs to have had more than 10% set-aside in his original plans.

lDairy farmers who decide to keep male calves with the intention of claiming beef special premium on them must have enough forage area to match their claims. The forage area available for beef will be that which is left after the number of dairy cows and sheep claims have been taken into account. (This year, aid is only available up to a maximum of two livestock units a hectare.)

lFarmers tempted by current high sheep prices to sell some of their old ewes or untupped hoggs before the end of the retention period (May 14) could incur penalties under the sheep annual premium scheme rules. Size of the penalty depends on the extent to which numbers retained fall below numbers claimed.

There may be some cases where limited ewe sales are feasible, says Mr Mordaunt. Farmers often claim on fewer sheep than they actually own to allow for natural losses. Where such losses have not occurred, there may be scope to sell surplus stock. "But ewes cannot be withdrawn from a claim, so sufficient must be held until May 14." Mr Mordaunt also warns of the danger of grazing cattle stuck on farms on set-aside land. "It will take another ten days for the governments slaughter scheme for animals 30 months and over to be up and running. In the meantime, farmers are holding on to their older animals waiting for compensation. But with grass slow to grow and silage stocks running out, some may be tempted to turn them out on set-aside land. This is not allowed under IACS."

As well as older cattle, many producers have also been building up calf numbers as they wait for government to open the calf slaughter scheme for animals less than 10 days old.

"The best policy at present for those who can keep the calves would be not to castrate them," advises Mr Mordaunt. "This can be done later, but cannot be reversed if bulls look the best bet as the market situation clarifies."n