15 August 1997

OTMS cut only way to get rid of weight ceiling – says NFU

CUTS of 6.6p/kg liveweight for cull cows and clean cattle going through the over-30-month scheme have been proposed by the NFU as a way to get rid of the 560kg payment ceiling.

The union has sent its proposal to all regions and committee chairmen and asked them to give it urgent consideration over the next week, with comments passed back to headquarters by next Fri (Aug 22).

The weight ceiling has been criticised by all sectors in the industry, primarily because of the way it penalised heavy suckler cull cows. Government cut the cull cow liveweight payments by 11% to 57.7p/kg on Aug 4 and, at the same time, introduced the 560kg ceiling for both culls and prime cattle payments. That wiped £140, or 40%, off the value of an 800kg cull cow.

Although NFU president Sir David Naish said the union had consistently opposed the governments decision to make any cuts to OTMS payments, he now accepted that the only realistic alternative to get rid of the weight ceiling was to get government to pay on every kg going through the scheme at a lower rate.

Sir David said that when he led a delegation of farmers from across England and Wales to meet farm minister Jack Cunningham, the minister refused to reconsider the cut (News, July 18). "He then challenged us to come up with an alternative to the use of a weight limit which would maintain the savings the government sought."

The NFU has since been trying to work out a way to get rid of the ceiling, but has been frustrated by the difficulty in getting accurate data from the Intervention Board on the weights of OTMS cattle.

Ian Gardiner, NFU policy director, accepted that the lower payments would mean that any cull cows weighing 633kg or less would be worse off under the unions proposal, and prime cattle of 622kg and less would receive lower payments.

"This is a tricky issue, trying to re-distribute the pain around the industry. But we believe that a maximum weight limit is unfair."

The proposal would mean an additional £85.68 for an 800kg cull cow, but a payment cut of £36.96 for a 560kg cow.

&#8226 A further green £ revaluation, due on Wed (Aug 20), is expected to strip another 5% from OTMS payments.

On that basis, removing the carcass weight limit would cut another 6.3p/kg liveweight from payments, bringing the cull cow price down to 48.5p/kg, while dropping to 56.3p/kg the payment for prime cattle.