Second chance for
Producers missing out on the
original Pig Outgoers
Scheme have been given a
second chance of
compensation, which could
also help those deciding to
quit in recent weeks, as
Hannah Velten finds out
MAFFS recently announced Pig Outgoers Scheme Mark 2 will give unsuccessful applicants and producers deciding to leave after the foot-and-mouth outbreak, a further opportunity for government aid to stop production.
MAFF aims to permanently remove a minimum of 120,000 sow places from the national herd and applications for the original scheme – about 1200 – show that many pig producers have already jumped at the chance for financial aid.
According to Jonathon Jessop, a Smiths Gore farm management consultant, the extended deadline, offered by the revised scheme, provides a chance for those affected by foot-and-mouth to reassess their future.
"Those producers who have made the decision to get out, will probably take the view that some financial aid is better than none. It will also provide those who have had to cull infected stock with a second opportunity for compensation."
Producers who missed the previous schemes deadline can also apply for Mark 2 aid.
But Mr Jessop believes that agreeing to lock themselves and their holdings into a 10-year commitment not to return to pig production even if profitability returns to the industry, producers must be sure of their decision.
Pig breeders who are turned down in the original scheme will also be able to reapply, he says. "Unsuccessful applicants will be notified in the first week of April and will be automatically sent a Mark 2 application form.
"There is no need for them to have their facilities revalued and they will have an advantage over new applicants because they will know their original tender was too high," says Mr Jessop.
With the closing date for Mark 2 applications on Apr 20, Mr Jessop advises those producers new to the scheme to get a copy of the application form from a MAFF regional office as soon as possible.
"To be eligible for the scheme, producers must prove that they were pig breeders in June 1998, so it is worth gathering evidence from census details or market receipts to begin with.
"MAFF will use the number of sow places on-farm to divide the tender by, to see whether the producer meets the magic £ a sow place criteria by which an application is approved.
"The criteria is to be decided by national organisations before sealed tenders are opened," adds Mr Jessop.
Evidence is also required to prove that the unit meets relevant welfare legislation, when pigs are still on-site.
"The most difficult part of the process is deciding on the amount of the tender, as bidding for government aid is alien to producers. The easiest way of working out a tender is by splitting the process into two," advises Mr Jessop.
Due to foot-and-mouth restrictions, the Mark 2 scheme allows valuations to be carried out by a farm adviser, consultant or accountant who is familiar with the business, without having to visit the unit.
"Working out an estimated valuation of the units breeding facilities to be destroyed, such as buildings and equipment, is the first step.
"Then the loss of overall unit profits for the next 10 years should be assessed, which can be worked out from past records or future budgets, taking inflation into account.
"Add these two figures together and decide on a realistic tender figure bearing in mind that you will probably get 50% of this figure back as aid and will also need to spend money on the process of dismantling facilities," he adds.
Only when MAFF has inspected premises and is sure that no pig production will occur on the unit for the next 10 years, will payments be released. This decommissioning must be completed by Dec 28, 2001.
"When tenants are applying under the scheme, the landlord also has to sign the form showing that they agree to keep that holding free from pig production.
"This does not mean that all the landlords other holdings are bound to the scheme," adds Mr Jessop.
Once completed, it is important to put the documents in the sealed bid envelope provided, otherwise applications will be rejected. *
Applications for the ongoers scheme are being taken and will be dealt with on a first-come, first-served basis, until all the funding has been used or until Aug 3. To be eligible, producers must be an existing pig producer and comply with all relevant welfare legislation and industry best practices.
MAFF will pay up to 5% of a successful producers reworked approved loan/overdraft for two years. The lender will have to confirm that the loan is in place and is based on a business plan, supplied by the producer, aiming to re-structure the business to become more viable in the long term. Interested producers should contact regional MAFF offices for an application form.
OUTGOERS MARK 2
• Only open to pig breeders.
• Sealed bid to receive aid.
• Commitment for 10 years.
• Applications close on April 20.
• Successful applications told by end of May.
• Decommission buildings by December 28.