Cereal levy cut set for July?

By FW reporters

THE Home-Grown Cereals Authority is expected to cut its cereal levy from July onwards. Farmers currently pay 40p to HGCA coffers on each tonne of wheat or barley they sell. The new rate, subject to ministers approval, is expected to be about 5% (2p) lower.

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

The HGCA is cash-rich, thanks to the 1996 harvest which produced an income of £11.1m. Spending during 1996/97 totalled just £8.5m, 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/ tonne, since there is little difference between income and spend in this sector.