12 December 1997

No green £ aid for UK sheep

SHEEP producers will not qualify for any green £ compensation, even if farm minister Jack Cunningham decides to apply for it.

He has until Jan 31 to put in a request to Brussels for aid to help offset this years four revaluations. This could be worth up to £978m for UK agriculture over three years.

Split between the various sectors, this would pay £446m to the dairy sector, £288m to cereals, £149m to beef and £46m to sugar beet, with another £48m available to arable producers to compensate for reduced area aid this season.

Francis Mordaunt of consultants Andersons estimates this would be worth just over 3p/litre for milk producers, £89/ha (£36/acre) for cereal growers (plus £11/ha (£4.50/acre) for the area aid element), £50 a head for beef cattle and £233/ha (£94/acre) for sugar beet.

But sheep producers are likely to be left out in the cold, despite having suffered a depressed trade for most of this year. This is because Brussels uses intervention prices to estimate the cost of green currency movements. "Since there is no intervention for sheepmeat, there is no basis for calculating the income loss, and so there is no compensation available," says Mr Mordaunt.

But the problem is likely to remain an academic one, as, so far, government has refused to apply for the money. MAFF argues that even the Brussels share – worth about £489m – would cost the Treasury £347m in terms of lost rebate from the EU budget.

Mr Mordaunt says the case for compensation is overwhelming. "All other EU member states which have had appreciable revaluations have had at least some compensation. As net contributors to the overall EU budget, UK taxpayers have helped subsidise EU farmers, but are being prevented from helping their own." &#42