Area aid rejig helps set-aside and linseed
Non-food plantings may prevent OSRsupport cuts
By Philip Clarke
OILSEED rape growers could avoid cuts in their area aid penalties for the first time in three years, if plantings estimates from EU grain traders body, COCERAL, are correct.
According to the merchants data, total EU plantings are more or less unchanged from last year at 5.996m hectares. But there has been a massive rise in the area of non-food crops grown, principally in Germany, France and the UK, which do not count towards the 4.934m hectares maximum guaranteed area under the Blair House agreement.
These crops are estimated to reach 971,000ha this year, more than double last years total. And once the area grown under the simplified scheme (230,000ha last year) has also been deducted, the EU could be 140,000ha below the MGA.
The increase in the non-food area is a direct consequence of growers running shy of the Blair House penalties when they made their planting decisions last autumn, says Francis Mordaunt of consultants Andersons. "There was also a belief that area aid on set-aside would be higher than for oilseeds this year, though that was not correct."
If the EU does undershoot, then that would effectively wipe the slate clean in terms of area aid cuts, with no penalties on 1999 IACS payments and no scale-backs carried forward from previous seasons.
While welcoming the implications of the COCERAL statistics, Mr Mordaunt says it is still too early to judge whether they are accurate. Certainly they are at odds with commission figures, issued three weeks ago, which suggest the EU will still be over the MGA.
"The final picture will not be known until January, which does little to help producers planning their autumn drilling now," he says. "I know many growers are planning on cutting back on oilseed rape. They will regret it if the COCERAL figures are right."
UK growers suffered a 30% reduction on their 1998 aid cheques due to over-planting. If paid in full, this season they would get £427/ha in England and £479/ha in the Scottish lowlands. *
MLC initiatives for sheep trade
TWO new initiatives for the hard-pressed sheep industry were launched at the Royal Welsh Show by the Meat and Livestock Commission this week.
A market update will be mailed to producers several times during the season to help them make marketing decisions, and 10,500 butchers will be encouraged to promote a new range of forequarter cut recipes and an easy carving double shoulder joint from lightweight lambs.
The first new marketing bulletin, mailed out at a cost of £10,000, forecast that an extra 110,000 clean sheep and 296,000 more ewes and rams would be slaughtered this season.
Skin prices had fallen from £8-£10 to 60p and total meat and live sheep exports were 16% down. As a result, the average value of 40kg lambs was £10.40 down.
But there were some good signs. Sheepmeat consumption was 10% higher in 1998, home- produced lamb market share rose from 61% to 66% and live sheep exports grew. *
Area aid rejig helps set-aside and linseed
SET-ASIDE and linseed area payments should remain near 1998 levels after a decision by the EU commission to allow MAFF to rejig agrimoney compensation.
Compensation was introduced by Brussels to top up aid payments to 1998 levels after frozen green rates, which protected values, were removed after the introduction of the k. But rules state that the amount of compensation should be based on the 1998 area.
Although set-aside almost doubled this season, the hope was that Brussels would agree to allow extra funds resulting from lower cereal and oilseed plantings to be converted into set-aside compensation, protecting payments.
It has since agreed to this, and, more surprisingly, appears also to have allowed linseed payments to be topped up in the same way, says Francis Mordaunt of farm business consultants Andersons.
"It was thought that Brussels would not allow this, since, unlike set-aside, farmers voluntarily chose to plant more linseed. But MAFF has said that the commission may give it complete flexibility, though it awaits final confirmation of this.
The commission appears to have been much more relaxed than expected."
Final figures will not be known until IACS returns have been analysed, says Mr Mordaunt.
£38/ha compensation
But, based on planting forecasts, set-aside should benefit from about £38/ha compensation, taking the total to £296/ha, compared with £302/ha in 1998.
Linseed payments should be worth £451/ha, assuming compensation of £58/ha, just £9/ha below 1998 levels. Cereals and proteins payments should be worth £234/ha and £338/ha respectively, only a few £ short of last years levels. Oilseed aid is more difficult to predict (see above). *