3 May 1996

NFUdelegates vote to cut set-aside rate for cereals by half

By Tony McDougal

THE NFUs cereals committee has agreed to press for a halving of the EU set-aside rate for the 1996/97 crop year.

NFU cereals delegates voted on Wednesday for a maximum 5% set-aside rate for 1996/97 and the maintenance of the voluntary regime. They rejected calls for a zero % rate, arguing it would be detrimental to the environment.

With the International Grains Council reducing its estimate for 1996/97 world wheat output to 564m tonnes, and milling wheat prices reaching a record £180/t, growing EU consensus exists for a dramatic cut in the set-aside rate.

Sources at both the Home Grown Cereals Authority and the Grain and Feed Trade Association claim the tight world market will mean that supplies will be below consumption for the fourth year running.

The NFUs demand is not as severe as proposals put forward by French farm minister, Philippe Vasseur, who called for a zero % rate.

EU farm group COPA/COGECA will hold a joint meeting to discuss member states plans in mid-May. EU farm commissioner, Franz Fischler, has announced that he plans to put the commissions policy to the Council of Ministers in June for a ratified decision in July.

Tony Donaldson, NFU economist, said farmers would rather be growing cereals than facing export taxes of about £38/t to keep internal prices from spiralling still further upwards.

A halving of the set-aside rate will allow an extra 600,000ha (1.5m acres) within the EU 12 to come on to the crop market.

Peter Limb, NFU cereals committee chairman, said it was important to increase cereal production, adding that he felt the committees decision would send the right message to Mr Fischler.

The calls for a set-aside cut come at a time when the EU cereal trade association COCERAL has criticised the £2.2bn spent on set-aside in 1995/96.

It claims that 1995/96 plantings are less than 0.2% below the 33.3m hectares sown with cereal crops in 1992, calling it a piece of lavish outdoor relief for landowners paid for by the EU taxpayer. &#42