31 October 1997

Sheep not free of reform

By Emma Penny

DESPITE scant mention in the EUs Agenda 2000 proposals, the sheep industry will be directly affected by reform in other sectors.

That was the warning from MAFFs head of beef and sheep, Richard Cowan, speaking at the National Sheep Associations seminar Planning for the Future Market, in London last week.

"There are no proposals for change in the Agenda 2000 document, but thats a somewhat blinkered view. If beef prices are set to fall by 30%, while pig, poultry and cereal prices also drop, it seems unlikely that current high sheep prices will be maintained."

A fall should mean an increase in ewe premium. But this is another area which needs consideration, warned Mr Cowan. "If the budgetary cost of the sheep meat regime rises significantly, support is likely to be reconsidered."

Added pressure will come from the next round of world trade talks, where the Cairns group and US will call for removal of the Blue box concept, under which headage payments are currently protected. "The US has made a significant move to decouple support (from production) in its Freedom to Farm Bill, and the EU is now under irresistible pressure to look at decoupling."

But a move to area payment, rather than on a headage basis, was fraught with problems, warned Mr Cowan. It would be difficult to determine payments across the UK as conditions varied so greatly. But a move to relating payments to environmental benefits was likely, he said.

"It is widely recognised that sheep are essential to maintain the environment. However, there are arguably too many to meet environmental targets, and schemes will have to be devised that meet that need for sensible contraction."

These views were echoed by Sir Leon Brittan, vice-president of the EC, who said countries outside the EU were likely to press for a rejig of Blue box arrangements – particularly headage payments – in the next round of trade talks.

"We shouldnt be on the defensive, and would be in a far better position for negotiation at these talks if we implemented some of the proposals in Agenda 2000."n

Richard Cowan: Sheep will not escape the effects of CAP reform.

Sir Leon Brittan: Agenda 2000 will help in world trade talks.