Analysis – New agrimoney unveiled

2 November 2000

Analysis – New agrimoney unveiled

By Philip Clarke, Europe correspondent

ARABLE farmers will receive a 6.78/ha top-up to area aid cheques this season, after the government unveiled new agrimonetary compensation.

The additional payment is a response to the “unprecedented difficulties” facing the sector, said agriculture minister Nick Brown.

“Arable farmers have had a very tough summer. They have been adversely affected by the strength of Sterling and the recent bad weather has added to the misery.”

In total, the government is paying out some 33.6 million to the arable sector, plus another 530,000 to flax and hemp growers.

That is the maximum compensation available for the appreciation of Sterling in the 12 months to July 2000, which has driven down direct payments.

About 85% of this will come from the UK Treasury.

The rest of the money will come from Brussels. The draw-down of funds still has to be approved by Brussels and is expected to be paid out next February.

The top-up will bring total area aid for the current crop year to 235.27/ha.

Basic amounts of 217.27/ha are due to go out later this month.

This will be on top of the 11.22/ha already paid, relating to another 57m of agrimonetary compensation announced last year.

Total payments will, however, be subject to a 1.64% scaleback in England (and about 3% in Scotland) for overshooting the arable base area.

Ben Gill, president of the National Farmers Union, described the announcement as “a step forward, which will give farmers a breathing space”.

He added: “As little as a month ago the government was repeating its firm refusal to grant any aid. The outcome is a remarkable achievement.”

But he said he was disappointed that the government had not seen fit to apply for the full available amount of 91m in agrimonetary compensation.

Arable farmers are facing unprecedented pressures, said Mr Gill.

Since area aid was assessed last July, Sterling has firmed another 9% to just 58p/Euro, forcing grain prices below the 60/t mark.

The current weather situation was another major concern, added Richard Butler, chairman of the NFU cereals committee.

Plantings are about 30% behind schedule, he estimated, and much of that which has been drilled will have to be re-drilled.

The NFU will now also be looking for maximum flexibility on the part of government in interpreting the IACS rules.

For example, the requirement for set-aside land to have green cover by the end of September has not been possible on many farms due to bad weather.

Mr Brown said he was sympathetic to these requests, but needed to take legal advice on how much flexibility he had with regard to subsidy rules.

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