26 June 1998

OSRarea aid faces huge cut

AREA aid payments to oilseed growers are expected to be cut by a massive 40% this year, after the release of new planting figures in Brussels this week.

The information, from trade body COCERAL, points to a 7% increase in EU plantings and a 10% rise in the UK area to about 520,000ha. After allowing for non-food crops that would still leave the UK 40% above its base area.

Undershoots in some other countries would be offset against this, but the UK still faces a 22% cut in aid on the basis of plantings alone, says Francis Mordaunt of consultants Andersons.

But on top of this will be another 7% scaleback rolled over from last year and a possible 11% price penalty, should oilseed values stay at their current level for much of the new season.

"These figures are far worse than we initially anticipated, though it must be remembered they are only trade estimates, not official figures," says Mr Mordaunt.

If applied, the full 40% cut would reduce area aid to just £256/ha (£104/acre) for 1998/99 for English growers. At this level, oilseed area aid would be much the same as cereal aid, which, ironically, is what Brussels has in mind anyway as part of the Agenda 2000 reforms. &#42