HOW NSA SEES ROAD AHEAD
The UKs sheep flock is the second largest in the developed world. It employs 250,000 people and constitutes 8.3% of total agricultural output. Rebecca Austin reviews from the National Sheep Associations report: Sheep UK – our natural hidden asset.
OUR sheep industry currently provides a turnover of £3.5m. Joe Stoddart, president of the National Sheep Association (NSA), believes this figure could continue to grow.
On the other hand, if badly guided through public misunderstanding, it could lose direction and go into sharp decline.
To ensure the former route is taken, NSA considers it necessary production support payments remain, with environmental objectives tackled alongside.
"Provided the electorate as a whole get value for money in terms of prime lamb, wool and a well cared for sustainable countryside, the natural, renewable resource provided by sheep farming will continue to be an essential part of the economy throughout the UK," says Mr Stoddart.
And he adds that support payments are justified on the basis of the social and environmental importance of sheep production. Some 40% – 93,600 – of UK agricultural holdings carry sheep. Less favoured areas (LFAs) account for almost 70% of total flock numbers, with this statistic increasing to 85% in Scotland and 88% for Wales.
Within LFAs 73% of farms have sheep as their main business. It is here, in the hills, that farmers are an integral part of a sustainable ecological balance. But average net farm incomes for cattle and sheep farmers in these areas are still below the average for all UK households – £16,000 a year, before tax deduction. Support payments vary from 25% of total income on lowland units to 60% on the hardest hill farms.
NSA expects an increasing proportion of income will come from the marketplace in the future, rather than support payments. In 1993, UK EU guarantee payments were £420m, 29.8% of EU payments. In the first years of the EU Sheep Meat Regime more than 90% of payments were allocated to the UK.
Successful producers in the future will have understood this shift in emphasis by looking at issues such as product consistency, which means year round supply. The production of well muscled, lean carcasses is another prerogative. "To achieve this there is a further need for effective mechanisms to ensure markets are transparent and producers receive clear signals on requirements and success in meeting them," says the report.
But any opportunity of maintaining or increasing profitability by increasing flock size is severely constrained by the quota system. Increased efficiency is therefore the only available opening.
The report states further improvements could be made in breeding, breed selection, production systems and selection of slaughter lambs. For example, the national lambing percentage is between 135% and 145% for cross-bred ewes. There must be room for improvement if rates of 180% are achievable in some flocks.
"The efforts of breed improvement groups must be encouraged and concentrated on economic production traits," the report says. "Research is also vital. It is a fundamental component of wealth creation in fragile rural areas where industry and its organisations cannot be expected to finance all essential strategic and production-orientated applied and developmental research."
Current forecasts suggest exports will reach 55% to 60% of total production by the turn of the century. But only if the product required by the market is available. Fortunately, the variety of lambs available in Britain enable producers to meet specific requirements of differing EU markets.
In 1993 45% of sheep production was exported, compared with 17% in 1980. The surplus in value terms was £170m in 1993, against a deficit of £100m, in 1980.
Under the GATT agreement New Zealand has an extra 20,000t in EU sheepmeat quota for 1995, and no restrictions on the volume of chilled product.
Competitive pressures on the UK sheep industry can therefore be expected to increase during the remainder of the 1990s at a time when support payments are likely to fall in real terms. However, the removal of non-tariff barriers will enable the UK industry to exploit its competitive advantage more fully.
The report concludes: "The comparative advantages of the natural resources, favourable breeding structure and flock size should mean the UK will maintain its competitive advantage as the most efficient EU sheep producer. But the consumer is the one calling the tune and it wants more convenient prepared products.
"To remain competitive the industry has to take advantage of advances in breeding, feeding and product development technology based on applied research and development work which must be maintained at a reasonable level."
Copies of Sheep UK – our natural hidden asset are available from the National Sheep Association (01684-892661). Price £10. *