22 May 1998

Large increase likely for SAP cash this year

SHEEP annual premium is likely to rise substantially this year, mainly to offset the low price of UK hoggets in the first three months of 1998.

Payment has been provisionally set at £18.16, or £23.31 including Less Favoured Area supplement. That is £6.55 more than 1997 rates. Values have been calculated using the green exchange rate of 1ecu = 78p, which applied on Jan 1.

Scottish NFU economist Scott Walker has cautioned that the provisional rate has been set early. Prices and exchange rates during the rest of 1998 could alter the final figure, especially if the 11.5% frozen green rate, introduced to buffer the effects of currency changes on direct income aid payments, is removed (see p22).

Assuming no change, the first advance payment, expected in August, will be £5.45 (30% of the total). LFA producers will receive an extra £4.63 (90% of the supplement). A second advance will be due in November with the final payment in May of next year. &#42

Allan Wright