14 May 1999

OSRaid set for cut

OILSEED area aid is almost certain to fall to cereal levels next year, despite last-minute attempts by the National Farmers Union to change Brussels mind.

But the union has succeeded in retaining so-called reference yields which will help offset some of the loss.

The EUs wish to establish a general aid payment to replace crop-specific ones is likely to be rubber-stamped by the Agriculture Council next week, says NFU oilseeds, protein and fibre crops adviser, Stuart Thomson.

Cereals rate

This means the minimum oilseed rape payment will now track the cereals rate, as agreed by EU heads of state at the recent Berlin summit.

It will fall next year to k58.67/t (£38.8/t), before rising to k63/t (£41.2/t) in 2001/02. The NFU argued that the latter rate should apply throughout the period.

"Farm ministers had originally agreed that minimum support would not fall below k66/t," says Mr Thomson. "This was changed to k63 at the Berlin summit, and then cut further."

UK producers will be particularly hard hit. Unlike many EU counterparts, they rely on the minimum support level due to Blair House penalties imposed for over-planting.

Other countries enjoy levels nearer to or at the full rate, which remains at about k82/t (£54/t) next year and just above k72/t (£48) the year after that.

But the NFU believes the council will allow the UK to retain its oilseed reference yield until 2002, after a proposal put forward by the special committee for agriculture. Brussels had originally planned to scrap it.

Under this mechanism, tonnage payments are converted to area aid using a base reference of 6t/ha (2.43t/acre), compared with the 5.87t/ha (2.37t/acre) level used for cereals.

"This is worth about £23.5m to UK growers, or £5-£6/ha depending on exchange rates," says Mr Thomson.

"This gives us a bit of breathing space, though it is a lot less than we would have liked." &#42