22 May 1998

Cereal levy cut set for July?

A CUT in the Home-Grown Cereals Authority levy is expected in July. Farmers currently pay 40p to HGCA coffers on each tonne of wheat and barley they sell. The new rate, subject to ministers approval, is expected to be about 5% (2p) lower.

Assuming a 21m tonne crop this harvest, the cut will shave more than £400,000 from funds. But HGCAs activities, notably research and development, will actually increase, says HGCAs Ian Aitchison.

The authority is cash rich, thanks to the 1996 harvest which produced an income of £11.1m.

However, the authority spent just £8.5m in the 1996/97 year, of which £5m went on cereals research and development and £800,000 on oilseeds R&D.

As a result, reserves increased to £4.2m. The long-term aim is to cut reserves to 12-15% of income. However, the oilseeds levy will stay at 65p/t, since there is little difference between income and spend in this sector.