28 November 2001
‘Ewe premiums set for cut’

By James Garner

SHEEP farmers face lower than expected ewe premiums next year as the government bids to uncouple sheep headage payments from production.

Ministers are likely to rubber-stamp a fixed-rate ewe premium across the EU in December. This is thought to be about Euro22 (13.60) a head.

But, under EU sheepmeat regime proposals, it seems certain that the commission will introduce national envelopes, similar to the type used in the beef sector.

This was confirmed by Lord Whitty, junior Department for Environment, Food and Rural Affairs minister, who welcomed the move.

Speaking at a Meat and Livestock Commission lamb lunch in London, Lord Whitty said it would give member states more room for manoeuvre.

“The key issue which the Agriculture Council still has to decide is the level of funding for national envelopes,” said the minister.

But he believed the amount would be “relatively small”.

However, the UK plans to bolster funds in its national envelope by transferring money from the budget allocated for premium payments.

Lord Whitty said he expected the EU to agree to this.

“This would allow us to make a small reduction to the basic rate of premium in the UK and use the savings to increase the size of our national envelope.”

Spending could then be directed to other methods of support, such as reducing sheep numbers and overgrazing in sensitive areas.

Support could also take the form of backing marketing initiatives and encouraging assurance schemes.

An EU scheme to buy up sheep quota using national funds, or money allocated under the national envelope, was also a likely feature.

Without committing to the buy up scheme, Lord Whitty signalled that the government needed to “consider it carefully”.

This would follow consultation with the industry and the findings of the policy commission on the future of food and farming.