By Robert Harris

RETENTION of the calf processing aid scheme (CPAS) has been welcomed by farmers leaders, but others in the industry believe it could harm beef producers long-term prospects.

The scheme was due to finish at the end of this month. On Monday, farm minister Nick Brown announced the reprieve as part of a packet of measures worth £120 million to help ease the farming crisis.

Aid will continue at a lower rate of Ecu80 (£56) a head from December, about 70% of the current rate. The move, said to be worth about £11million to the industry, will be reviewed at the end of March 1999.

“This is welcome news,” says the NFUs Carol Lloyd. “We were concerned that the scheme should continue at least until beef exports resume.”

About 450,000 calves were exported before the beef ban, she notes. CPAS cleared these – and more – from the market. “As long as we are not exporting beef, the market cannot deal with them.”

But Peter Scott, secretary of the National Federation of Fresh Meat Wholesalers, the abattoirs body, is disappointed, describing the decision as a short-term fix which threatens jobs in the slaughtering industry.

It is not in the long-term interests of beef producers either, he says. “A payment of Ecu80 is higher than we wanted, and more than MAFF expected. It confirms the European Commission is happy to reduce beef production in Europe at the UKs expense.”

Waiting for the beef ban to end will make little difference, he adds. Few animals will be exported at first, and there is no provision for calf exports; only animals over six months of age will be eligible.

Robert Forster, chief executive of the National Beef Association, reckons the reprieve will underpin beef imports. Last year, 27% of the beef consumed in the UK – 230,000 tonnes – was imported, at a cost of £345m.

“A significant proportion is discounted Holstein bull beef from the Netherlands, Germany and Belgium. It would be far better for the British industry to produce it here.”

But compensation remains too high for that to happen, he suspects. “We are not altogether happy with £55 a head, unless it heralds a stepped reduction. We preferred £30-£40, to give the bobby calf market and the rearing sector time to find their feet.”

But Jane Connor of the Meat and Livestock Commission reckons black-and-white calf-rearers now face a borderline decision. “More better-quality calves could be retained for finishing – there is always the beef special premium incentive at the end.”