16 June 1995

Brussels blocks dairy newcomers

BRUSSELS has dealt a knockout blow to UK industry plans to help new entrants into dairy farming.

It has ruled as illegal any suggestion of "lending" quota to new entrants over five to 10 years while they establish their businesses.

This would rule out plans drawn up by young farmers and the Farmers Union (?) to help newcomers.

The European Commission has ruled the quota would have to be given – free – to new entrants to keep permanently.

The shock news was given to the Commons Agricultural Select Committee on Wednesday by NFU President Sir David Naish.

Even if the union or others were able to introduce some way of syphoning off a percentage of permanently traded quota to form a pool for new entrants, they could no longer contemplate letting the newcomers use it for a few years before returning it to the pool, he explained. He pointed out the difficulties this would now cause, with the NFU having to decide which new entrants should be given quota and how much.

It could involve giving someone about 200,000 litres worth £100,000, NFU milk adviser Dr Julie Smith said later.

Sir David said there was still the problem of making established producers, who still had a business to run under increasing economic pressures, part with quota for a new entrants pool. There was an additional problem of developing producers who also needed more quota.

Earlier both Sir David and Bryan Jones for the Farmers Union of Wales refuted claims that the quota market was rigged last year when prices soared.

"We have endeavoured to establish genuine evidence to no avail," said Sir David. Mr Jones added: "We have seen no evidence of rigging whatsoever."

&#8226 The select committee will make the UK milk industry the subject of its prime autumn inquiry.

Geoff Hollis, head of MAFFs livestock group said whatever system was devised to help new entrants, there was no guarantee genuine cases would be helped.