18 July 2000
Flax growers face area aid cut

By Philip Clarke

FLAX and hemp growers face a substantial cut in their area aid payments next season, after European agriculture ministers voted to reform the regime.

Changes decided in Brussels late on Monday (17 May) will see the annual support budget cut from the current Euro158 million to about Euro56m (35m at time of writing).

The deal, which shifts payments towards processors rather than growers, was welcomed by European farm commissioner, Franz Fischler.

He said the revised scheme would put an end to so-called “premium hunting” by farmers simply growing the crop to claim “excessive” aid payments.

“This reflects the new commercial reality,” said Mr Fischler.

Area aid will be realigned with the linseed rate for next year at Euro445/ha, compared with last seasons Euro709/ha for flax and Euro663/ha for hemp.

From 2002/03 the rate will be the same as for all arable crops, at just Euro371/ha.

On top of this, processors will be paid a supplementary aid, with the intention that some of this will be passed back to growers in the form of higher prices.

For long-fibre flax this will start at 100 euros/t next season, climbing to Euro200/t by 2006. For short-fibre flax and hemp, as mainly cultivated in Britain, the rate will be Euro90/t.

A new system of maximum guaranteed quantities is also being introduced, limiting the UK to 12,150t at the full rate of processing aid.

The National Farmers Union said the deal was better than that originally proposed by the European Commission.

That would have paid just Euro40/t processing aid instead of the Euro90/t finally agreed, said the unions Stuart Thompson.