By Philip Clarke, Europe editor

A NEW flat-rate sheep annual premium, worth Euro21 (13) a ewe, is expected to form the centrepiece of new sheepmeat regime proposals, due from the European commission next week.

If confirmed, it will signal a sharp improvement from the 2001 premium, which industry pundits are forecasting at a mere Euro9 (5.60) a ewe, in response to sky-high lamb prices on the Continent.

Exact details of the long-awaited plan will be decided by commissioners in Brussels on 8 May. But already it seems certain the current deficiency payment type system, which moves premium up and down according to market prices, is to be scrapped.

“The new system will be much simpler and should be welcomed by everyone,” predicted one senior EU official.

The flat rate premium would be paid in one shot, compared with the current system of two advances and a final balancing payment. And, if the rate is confirmed at Euro21 a ewe, plus a Euro7 (4.40) a head less favoured area supplement, it will not cost the EU budget any more.

“The way things stand, Euro21 looks attractive,” said NFU livestock advisor Kevin Pearce.

“Last year the sheep annual premium came to Euro17.5, but this year it could be less than half of that.”

The Meat and Livestock Commission is predicting a figure of just Euro9 (5.60) a ewe.

“Sheep prices have been forging ahead in France and Ireland, up 20% and 15%, respectively,” said sheep strategist, Jane Connor.

“But, due to foot-and-mouth export restrictions, the UK has been left behind. This will really skew the sheep annual premium calculation against us.”

But, even though a new flat rate ewe premium would help the UK, the NFU believes there is a strong case for increasing the overall budget, to reverse the long-term decline in EU sheep production.

Mr Pearce is also concerned about the small print.

“There has already been talk about cross compliance and of a ewe lamb rule. This would be like the heifer rule for suckler cows, with a certain % of each claim having to be made up of lambs.”

Other details, confirmed this week by the Brussels source, reveal that the 20% deduction in ewe premium for milk sheep producers in southern member states will remain, though they will now qualify for the full LFA supplement.

“We are also doing away with the scheme that allowed milk sheep producers to fatten their lambs and claim the full annual premium,” he said.

“There was no justification for this. Either you are a milk sheep producer or you are not.”

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