29 December 1995

By Philip Clarke

Irish special sheep deal outrages home lobbies

IRISH sheep producers are to receive a substantial boost to their 1995 ewe premiums, much to the chagrin of lobby groups this side of the Irish Sea.

The Irish have fought a long campaign to secure extra cash to make up for depressed lamb prices this season.

Weaker prices in France (which takes 80% of Irish production) and over-supply at home were the main reasons for the drop in returns.

According to Irish Farmers Association livestock director Kevin Kinsella this led to a 25% price fall for early lambers and a 5% drop for mid-season lambers.

The deal reached in Brussels, according to Irish government sources, is as follows:

&#8226 Extension of the "rural world premium" (less favoured area supplement) worth Ir£5.48/ewe to sheep producers in non-LFAs.

&#8226 An increase of Ir£2/ewe "headage payment" (equivalent to HLCA) on ewe hoggets in the "disadvantaged areas".

&#8226 An extra Ir£1/ewe headage payment on mountain ewes in the "more severely disadvantaged areas".

The first measure applies to both Northern Ireland and the Irish Republic, benefiting 9800 producers to the value of Ir£8m. The second and third measures are for the Republic only and will cost the tax-payer another Ir£2.48m.

In addition, the basic ewe premium is to be raised by Ir£2.98/ewe, in line with the basic increase for the whole of the EU, bringing the total 1995 payment to Ir£20.35/ewe. (UK producers should receive about £19.80/ewe, of which £12.34 has already been paid.)

IFA president, John Donnelly, said the overall package fell far short of the full income loss, particularly for the 75% of flock owners in the disadvantaged areas.

But lobby groups in England, Wales and Scotland have expressed outrage that the Irish should get any special deal at all.

"We sell a lot to France too, and prices were not very different over here during that crucial (April to June) period," said NFU livestock adviser, Kate Trotman. And even though the Irish deal still has to be ratified, she was concerned that paying out extra subsidy in January and February to our major competitors would help them undercut the market.

This view was echoed by Scottish NFU livestock conveynor, Stewart Whiteford. "The package is also trade distorting in that it maintains an industry in Ireland that perhaps should not be kept going at current numbers.

He was also concerned that it was another step down the road to re-nationalising the CAP.

"The French have already won special compensation for adverse agrimonetary movements. Now we have compensation based purely on the failure of EU lamb prices to converge." The Scottish NFU had argued for an extension of the LFA supplement for all EU sheep producers, a policy taken up by EU farm organisation COPA.

John Brigg, chairman of the National Sheep Association, was also surprised at the outcome. "We were led to believe that, now we have a single market, we should have equal treatment. National aids would have been bad enough, but extra Brussels cash is something else, especially when the UK is a net contributor to the EU budget."