23 October 1998
CAP reform could mean dearer land

AGENDA 2000 proposals could push up land prices.

The proposed threefold increase in cattle extensification payments and changes to stocking density calculations under Agenda 2000 proposals could lead to a grass-keep shortage in the UK – and hence higher land prices.

Industry representatives visiting the SIAL 98 food fair in Paris expressed deep concern over plans to add all cattle over eight-months-old to suckler cows and steers in the calculation for extensification payments.

That, combined with the suggested tripling of extensification payments would encourage producers to take on more land rather than reduce herd numbers. And the increased demand would push land prices up.

One prominent member of the British contingent at the Paris fair, who chose not to be named, said that if world trade talks and CAP reform removed measures such as export refunds, which compensated farmers for the price gap between EU and world prices, UK beef would have to compete at world market levels.

“At this time we would need to be reducing input costs to remain competitive with these prices, not facing rising grass-keep costs.”

Responding to the concerns, NFU beef adviser Kevin Pearce added that the proposal would lead to immense difficulties in calculating stocking densities: “At the start of the year, an in-calf cow counts as one livestock unit. But eight months after calving, the calf has to be counted and the stocking density has to change.

“Juggling calculations with land requirements would be hugely time consuming for the producer.” Combine that with different production systems, where cattle are sold at different times of the year and at a variety of ages, and the payment scheme would become virtually impossible.