18 February 2000

Cuts likely to be deeper

DEEPER than expected cuts in grain intervention prices are anticipated when the European Commission finalises details of the 2000/01 price proposals in Brussels next week.

Under Agenda 2000, monthly increments to the intervention price were supposed to be maintained at l1/month (62p/month). But now the commission is looking to trim 7% off this "carry" when stores open in November, taking it to just l0.93/month (57p/month).

Brussels estimates this will save about l8m (£5m) in 2001 and l17m (£10m), if similar cuts are imposed, for 2002.

The cumulative effect would be that intervention at the end of the season (May 2001) would be worth l116.76/t, (£71.83/t), about l10 (£6) less than this season.

Final decisions on the price package will have to be taken by farm ministers, probably in May or June.

Meanwhile, cereal market managers in Brussels have re-examined plans to tighten intervention standards for cereals from next harvest. These include a new 10% minimum protein content for wheat, rising to 10.5% by 2002. Moisture content will be cut 0.5% to 14% and wheat specific weight will jump from 72 to 75kg/hl.

Member state opposition at last weeks cereals management committee meeting in Brussels was heated. Several accused the commission of trying to achieve the 20% intervention savings it was originally after from Agenda 2000, through the back door.

While officials said they would produce a new draft there are expected to be few concessions. &#42