16 March 2001

Early payment of livestock subsidies eases cash flow

By Andrew Shirley

BELEAGUERED stock farmers will have their cash flow boosted by early payment of livestock subsidies, but compensation for cattle reaching over 30-months-old has been ruled out.

MAFF and the Scottish Executive rural affairs department have agreed to bring forward payments covering a number of schemes. They include beef special premium, suckler cow premium and sheep annual premium.

These were due to be paid in the middle of the year but will now commence at the beginning of April.

Scottish rural affairs minister Ross Finnie hopes the plan will help ease the burden of farmers hit by the foot-and-mouth crisis.

Animals slaughtered under compulsory measures will still be eligible for BSP, SCP and SAP payments.

But there is not yet a firm commitment that certain scheme rules will be relaxed during the outbreak. Farmers claiming extensification payments, for example, are worried that movement restrictions could they exceed maximum stocking levels.

Under current regulations stocking densities must fall below 1.6 livestock units/ha to receive the full grant. Lesser payments are available for slightly higher stocking rates of between 1.6-2.0 lu/ha.

The Scottish NFU is hopeful of a positive response. "We are still waiting for confirmation from the EU Commission, but the indications have been favourable," said a spokesperson.

Commission guidelines state that only 80% of livestock count towards stocking density on farms subject to movement restrictions during an epidemic. This continues to apply for 20 days once restrictions are lifted.

Mr Finnie says his department will be interpreting subsidy rules as flexibly as possible.

Farming unions are also pressing for recompense to beef producers caught up in movement restrictions and whose steers have exceeded the 30-month limit. Animals entering the disposal scheme are worth significantly less than the price achieved for prime beasts.

SNFU livestock policy manager Richard Henton believes farmers have a good case, although he says it is difficult to say how many will be affected. But he estimates that even before the foot-and-mouth outbreak 7% of cattle entering OTMS were prime beasts.

MAFF says there is no money available to pay any consequential losses resulting from such cases. But Meat and Livestock Commission economist Duncan Sinclair believes there is a precedent in the case of cattle backed-up on farm after tuberculosis testing.

A case for compensation could be made when the product has been devalued and gone into OTMS, he says. &#42