28 April 1995

Facing EU aid threats

UK farmers and the farming industry will suffer if they fail to recognise the pressures facing European farming.

Speaking at the annual luncheon of the Agricultural Engineers Association, NFU and COPA president Sir David Naish said: "Everyone in the industry should work hard to ensure that capping of area aid payments does not come onto the agenda over the next three years."

There is no doubt, warned Sir David, that the UK government wanted to see the cost of the CAP budget reduced. He suggested that if capping of area aid did become a reality, it would be used as a method to progressively rack down income support.

The effect on the UK industry would be severe. "Although farm incomes, even those the pig sector, have risen many businesses still show a low return on the capital investment," explained Sir David.

Much of the recent increase in farm profitability was due to the effects of exchange rates, he said. But that was a good thing because the cost of input inflation had been high in the UK compared with other EU countries.

Since 1980 the costs of farm variable inputs in Germany had risen by only 5% whereas in the UK they had risen by 67%. During the same period output prices rose by 46% and minus 10% respectively. &#42

Stephen Howe