3 May 1996

FW conference

demands extra BSE provisions

NEWS of further provision for beef intervention in May and of the deadweight option in the slaughter programme for animals over 30 months of age were welcomed at the first farmers weekly Coping with BSE conference.

Speaking at Aberdeen on Monday evening, Scottish NFU director Richard Henton promised that every effort would be made to ensure that the UK got a bigger share of the 50,000t EU intervention allocation than last month.

"We are already putting as much pressure as possible on government agencies to get a proper share," he said.

He also called for steers to be slaughtered first in the 30-month-plus category, to clear the backlog of expensive animals on farms.

Final payment delay

But he had bad news on the early payment of beef special premium and suckler subsidy, expected as part of the BSE rescue package from government. "It now looks as if the final payments will not be made until the end of May," said Mr Henton.

A relaxation of the grazing set-aside rules was also called for by Mr Henton.

Meanwhile, financial advice came at the conference from Grant Thorntons Gavin Steel. He recommended farmers should:

&#8226 Prepare a cash flow forecast to predict borrowing requirements over the coming months. Be realistic and update the projection as necessary.

&#8226 Consider how the peak borrowing requirement can be reduced if it exceeds the overdraft limit. This may involve selling animals now, delaying the purchase of additional stock, or selling output from other enterprises early. Loan repayments may also be delayed, subject to arrangement.

&#8226 If required and possible, an increase in the overdraft facility may be negotiated.

&#8226 Identify assets which can be sold as a last resort without jeopardising the business.

&#8226 Approach your bank before they approach you.

In the medium term, profits may be reduced as a result of such policies. But this may be necessary in order to retain the confidence of the bank and remain in business.

Long-term, it may also be prudent to reduce the dependency of your business on too few enterprises, suggested Mr Steel. &#42