15 December 1995

MAFF predicts static incomes for LFAs despite bad weather

By Tony McDougal

MAFF expects net farm incomes in less favoured areas this year to be the same in real terms as in 1992/3 despite two years of unfavourable weather.

Junior farm minister Tim Boswell argued that though there had been cuts in hill livestock compensatory allowances during that period, recent green £ devaluations had offset those losses.

Speaking in the House of Commons debate on hill farm incomes on Monday, Mr Boswell said it was misleading to consider HLCAs outside the context of total government support for livestock in less favoured areas.

He said up to £610m would be paid in direct subsidies to livestock farmers in the LFA in 1995 and this would increase to £655m in 1996, of which only £108m would come from HLCAs.

"The LFA supplement in the sheep annual premium is making an increasingly important contribution. Taking account of the recent devaluations of the green £, the supplement in 1995 is expected to amount to £5.69 a ewe.

"The tables prepared for the autumn review show that the increase in food and other input costs during 1994-5 should be set against a forecast increase in direct livestock subsidies and better returns from sales," he added.

Rise in premiums

He stressed that suckler cow premiums would rise by 24%, from £115.12 to £143.04, while the beef special premium scheme would rise by 28.5%, from £85.09 to £114.03.

But his message failed to win backing from either Liberal Democrat rural affairs spokesman Paul Tyler (North Cornwall) or backbench Tory MP Robert Hicks (South East Cornwall).

Mr Hicks feared the government was not supporting its hill farmers to the same extent as other EU member states and felt the role played by LFA farmers in managing the uplands and boosting the rural economy had not been taken into account.

Mr Tyler claimed UK farmers had the lowest level of HLCA support in Europe and the UK had been the only country in Europe to cut its HLCA rate.

And he emphasised the point that there was an extra cut to be faced by hill farmers in disadvantaged areas. "The ministry has decided to make a change in the eligible stocking levels for ewes. That represents a real cut."

Mr Boswell replied that the government would wait until the adjustment of the sterling/ecu rate on Jan 1 before making any decision. But this infuriated Mr Tyler.

"He appeared to suggest the adjustment of the sterling/ecu rate on Jan 1 could make the ewe stocking rate change into an increase in income instead of a cut. That beggars belief and will further undermine MAFF credibility if there are no substantial improvements." &#42