5 March 1999

How French young farmers push for even better deals

By Mike Stones

FRENCH young farmers are battling with the Treasury for further interest rate cuts to encourage newcomers into the industry. The UK government should follow suit, say Welsh farmers leaders.

The under-35s already qualify for preferential deals in France, including special loans and subsidies and favourable interest rates of 3.8% in lowland areas and 2.6% in less favoured areas.

"This compares with 6.5% for an average bank loan," Jean Michel Reynes of Jeunes Agriculteurs, the countrys young farmers organisation, told FW at this weeks SIMA show in Paris.

Each January young farmers representatives meet with the agricultural ministry and Treasury officials to agree loan rates for the coming year. Although last years rates were cut by 0.1% in lowland areas and 0.2% in LFAs, this year the government is resisting further reductions. Mr Reynes believes such financial aid is essential to maintain a well-structured farming industry.

"Without preferential grants and loans for young farmers, only farmers children or investors will be able to start farming. This government help ensures that 9000 new entrants under the age of 35 start their farming career each year." Without them large areas of the countryside would become derelict, he added.

Quoting a previous young farmers leader, Mr Reynes said: "It is generally recognised that it is more important to keep neighbours than acres. The aid is achieving its aim because 10% of new entrants are from non-farming families."

The Farmers Union of Wales has put forward a range of proposals to encourage more young farmers here to enter the industry, ahead of next weeks Budget.

Like the French, preferential interest rates feature high on the list. It is also asking for business start-up allowances, a properly funded early retirement programme to make room for new entrants, and affordable rural housing.

Direct action is also needed to help all farmers recover from recent "devestating blows", adds the FUW. All farm subsidies should be exempt from tax, and there should be no increases in vehicle and fuel taxes.

IN BRIEF

uAGRICULTURAL supplier ACT has reported a 7.7% fall in turnover to £36m in the year to December 1998. But pre-tax profits fell less than 1% to £324,000. Although feed and fertiliser prices dropped by about 15%, much of that fall was offset by increased sales, especially of fertiliser and fuel, says chief executive, John Griffith. The figures are unaudited due to a change in year-ends. Full audited accounts for the 18 months to June 1999 will be published in September.

uA MAJOR survey of UK farming starting next month will give farmers the chance to draw an accurate picture of British agriculture, says NatWests agricultural senior executive, Brian Montgomery. The NatWest millennium farm survey will be based on farmers views and expectations, and key findings will be distributed to the press, broadcasters and key decision makers, he says. This is the second national farming survey carried out by the bank; the first was in 1992.

uSASTAK, the machinery ring covering Shropshire and Staffs, has reported a record member-to- member turnover of £1.4m in the year ending Nov 30, 1998. Of the 408 members, 88% used it during the year. Trading profit was £14,951 with assets increasing to £47,777. Contracting and hire produced a turnover of £675,000 and labour services £350,000. SASTAK has joined forces with the Energy Consortium to offer discounts of up to 20% on electricity, water and gas. &#42

Weaners move up

WEANER prices are rocketing as pig supplies tighten.

Worth £20/head in mid-January, they are now changing hands for more than £30. The tighter supplies reflect the 11% contraction in the breeding herd last year, says Meat and Livestock Commission economist Tony Fowler.

Fewer weaners means fewer finished pigs in the pipeline, sparking further predictions of a rapid upturn in values. Latest MLC predictions are for levels of between 95p and 101p/kg dw by July.

"Hard-pressed British pig farmers will reach the break-even point by the middle of the year and return to profit soon after," says an MLC spokesman.

Slaughterings are already declining, with the weekly kill having fallen from 330,000 head before Christmas to less than 300,000 in mid-February. And by the final three months of 1999, the figure could be 15% down on 1998 levels..

Cereals-as-food imports record

THE UK looks set to export a record 3.5m tonnes of cereals as food and drink products, according to latest figures from Food from Britain.

Grain equivalent cereal tonnages, which measure the amount of raw grain in processed product, rose by 10% to 3.05m tonnes for January-September 1998 compared with the same period in 1997. Final quarter figures are expected to continue the trend.

Top performers include breakfast cereals, up 37% to 255,000t of grain, and malt, which rose 20% to 65,000t. In the grain-fed livestock sector, dairy products accounted for 542,000t of cereals, up 17%.

"Export increases have been achieved despite the strength of sterling and the economic downturn in some markets, such as south-east Asia," says Helen Wood of British Cereal Exports.

"It represents an unbroken ten year records of growth in this sector."

First yearly loss from grain group

VIKING Cereals made a loss of £326,000 in the year to July 1998, the first in its 22-year history.

Almost one-third of that is a debt owed on a shipment of grain which was released by a Spanish agent before payment was secured, explains chairman Oscar Spencer.

The poor harvest also hit the balance sheet. The company, based in Lincs and East Yorks, has 400 members (up 10% on the year) who commit about 350,000t of grain. But low bushel weights reduced yields and therefore levy payments, says Mr Spencer. And grain bought forward at harvest to blend with the poorer quality supplies was sold at a loss.

However, levy payments and returns to members are not affected. This year should see better results, though perhaps not matching the retained profit of 1996/97 which hit £84,000, he adds.

BUDGET FAXBACK 0181-652 4069

farmers weekly and FWi have teamed up with chartered accountants Grant Thornton to provide quick, detailed analysis of next weeks Budget.

Our faxback service will reveal all from 9pm on Budget night, Tue, Mar 9. Our FWi team will also be working overtime, so farmers with internet access will be have all the information at their fingertips from the same time.

Experts suggest that inheritance tax is likely to feature heavily in Gordon Browns second full-blown budget. The seven-year limit for lifetime transfers could be increased, perhaps even doubled. A lower starting rate of £100,000 might also be introduced. Business and agricultural property relief could also be cut.

Several measures are likely to be introduced to tidy loopholes arising from last years major capital gains tax reforms. And will the chancellor raise stamp duty to bring it more into line with Europe? Environmental taxes are firmly on the agenda, could this include input taxes, too?

Dial the special faxback number (0181-652 4069) and follow the simple recorded instructions to find out on the night. Or, if you prefer, visit FWi at http://www.fwi.co.uk