Good market if UK intervention can be improved
Good market if UK intervention can be improved
By Robert Harris
GRAIN intervention should become a real market for UK growers next harvest if recent recommendations to improve the system are adopted.
The suggestions are contained in a report compiled by a red tape working group, chaired by retired Midland Bank agricultural director, Norman Coward.
The group was one of three set up by farm minister, Nick Brown, after NFU pressure last autumn to review regulatory burdens.
David Balderson, chief executive of Lincs-based Viking Cereals, believes the measures could put UK intervention on a par with France and Germany.
"Many people do not realise how much the lack of effective intervention has cost the UK farmer," says Mr Balderson, who was on the working partys cereals sub-group.
"With no effective support, our market drops to the lowest common denominator – the distressed price on the world market. Had it been possible to offer 300,000t of wheat into intervention last season, the market could have been £10/t higher."
The report highlights the cost of grain testing as a key issue. Under EU rules, a sample must be supplied for every 500t of grain offered. A 10,000t lot would, therefore, need 20 samples. But in France and Germany this would be bulked into an aggregate sample.
"A French trader would pay £120. A UK trader would have to pay £5500 + VAT," says Mr Balderson. "And treating the grain as individual lots increases the risk of rejection. Both factors significantly increase the cost risk taken by UK traders."
In-situ storage – where intervention grain can be held in a merchant or co-op store – is widely used on the Continent, and needs to be encouraged here, says the report.
"This would allow merchants and co-ops to put together bulks of known quality from harvest onwards, helping to support values from that time," says Mr Balderson. It would also allow traders to blend wheats, widening the intervention safety net to include all varieties, he adds.
The report suggests several other improvements, including new tests to avoid discrimination against UK soft milling wheats.
Mr Balderson believes many recommendations in the report could be adopted by next harvest. While the Intervention Board wanted to study it in more detail before commenting, initial reaction from the minister suggests swift progress is likely.
"I am impressed by the approach, which concentrated on practical ideas for improvement, many of which could be implemented quickly, in time for the 2000 harvest," said Mr Brown. *