By Peter Crichton
AFTER months of consultation with the industry, MAFF has announced final details of the Outgoers Scheme.
Minister Nick Brown has pledged a total of 66 million for the British pig industry under the heading of Pig Industry Restructuring Scheme 2000.
The first stage of this aid is the Outgoers Scheme.
This is designed to compensate UK pig breeders who have already decided, or plan to, give up pig production in the year ahead.
Any pig breeder who was in business in June 1998 – which is the key date – is entitled to apply.
Applications for aid must be submitted no later than 2 March, and have to be backed up by valuations carried out by a qualified valuer.
Successful applicants will submit the replacement value of all their pig-breeding facilities, together with an estimate of the loss in value of their business given that pigs cannot be kept on a holding for a 10-year period.
Those applicants who have left the industry since June 1998 and have decommissioned their pig-breeding facilities will only be able to submit the second part of the valuation.
Aid will be payable at 50% of the total of the quote valuations, with a further 10% incentive payment calculated on the combined value of the valuations.
In return, not only does the applicant have to agree to a 10-year bar on all pig production on the farm in question; but he will also have to give an undertaking that he will not be personally involved in pig production for the 10-year period, except as a waged employee of an existing business.
The successful applicants will also have to decommission all pig-breeding facilities on the holding by 31 August, 2001 with aid payable by the 26 October, 2001.
Consideration needs to be given concerning the tax treatment of aid received.
According to the Inland Revenue it is not a tax-free payment and can be apportioned as part revenue and part capital, as far as the valuation of buildings and fixed equipment is concerned.
The purpose of the scheme is to reduce the UK pig herd – as measured in June 1998 – by 16%, which is equivalent to 124,000 sows.
According to the National Pig Association, the UK herd has fallen by over 20% during the period in question.
But the association recommends that breeders considering leaving the industry should take this opportunity to apply for aid.
- Farmers meet ministry on pig plan, FWi, 04 December, 2000
- Date set for pig restructuring, FWi, 27 November, 2000
- Pig scheme delay frustrates farmers, FWi, 23 November, 2000
- Peter Crichton is a Suffolk-based pig farmer offering independent valuation and consultancy services to the UK pig industry