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NFU puts up alternative to OTMS cuts

13 August 1997
NFU puts up alternative to OTMS cuts

THE NFU has suggested a fairer way of cutting OTMS payments after the Government imposed reductions last week.

Speaking today, president Sir David Naish said: “The only realistic alternative is for the Government to pay for every kilogram entering the OTMS at a lower payment rate.”

Before the Government cuts were imposed, Sir David had pleaded with the Government to delay their introduction until the union had come up with a fairer way of spreading them.

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NFU puts up alternative to OTMS cuts

13 August 1997
NFU puts up alternative to OTMS cuts

    Read more on:
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NFU puts up alternative to OTMS cuts

13 August 1997
NFU puts up alternative to OTMS cuts

By Boyd Champness

THE National Farmers Union has come up with an alternative way of cutting funds to the over-thirty-month scheme, in a bid to convince the Government to revise reductions it imposed earlier this month.

On August 4, the Government introduced a weight ceiling payment of 560kg for cows entering the OTMS, as well as a general cut in cow rates from 64.9p/kg liveweight to about 57.7p/kg.

The NFU opposed the cuts, particularly the weight ceiling payment, claiming that it penalised suckler cow producers, with the price paid for an 800kg cow falling by £140 or 40%.

NFU president Sir David Naish pleaded with the Government to delay the introduction of the payment cuts until the union had come up with a fairer way of spreading them. However, the Government maintained that the BSE crisis had cost taxpayers £4bn, and the cutbacks went ahead as planned.

“The Government said that it has to save money on the scheme at the at the end of the day, and that if we wanted to put forward an alternative scheme we were entitled to, but it would still have to deliver the same savings,” a spokeswoman for the NFU said.

Under the NFU proposals, the carcase weight payment would be cut by 6.6p/kg liveweight for both cows and clean cattle. This means a cut in the cow rate from 57.7p/kg liveweight to 51p/kg, and on clean cattle from 65.9p/kg liveweight to 59.3p/kg.

The changes are expected to assist suckler cow producers. However, early indications suggest that it might mean lower returns for dairy producers who put their cattle through the OTMS, because their animals are generally lighter. However, statistics from the Intervention Board suggest the NFU proposal might be fairer across the board, with 63% of cattle going through the scheme over 595kg.

Releasing the figures today, Sir David said: “The NFU General Purposes Committee has now considered all the possibilities and decided the only realistic alternative is for the Government to pay for every kilogram entering the OTMS at a lower payment rate.

“I do not like putting this proposal to members, but we have been backed up against a corner. We have to carefully consider as an industry which position we should take in these difficult circumstances,” he said.

A further green pound revaluation is likely on August 20, and is expected to lead to a further cut of about 5% in the Sterling rate of OTMS payments. If the revaluation goes ahead, producers can then expect to receive only 48.5p/kg liveweight for cows and 56.3p/kg liveweight for clean cattle.

“The consultation process will run for a week. The NFU will take its proposal to regional officers so they can put forward their views. We need to find out what the members think of it,” the NFU spokeswoman said.

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