Cereal sector faces recession – NFU

7 August 2001

Cereal sector faces recession – NFU

By Tom Allen-Stevens

ARABLE farmers have again demanded 57 million to compensate for the strength of Sterling, claiming they are being overlooked because of foot-and-mouth.

Richard Butler, chairman of the National Farmers Union cereals committee, said arable growers face a 400m drop in crop income alone in the coming year.

“Everyone is all too familiar with the desperate crisis facing livestock farmers What isnt understood is the depth of the crisis facing the arable sector.”

Statistics showed income before drawings on an average 100ha arable unit dropped from 33,000 five years ago to just 5000 just last year, said Mr Butler.

“On top of that, we have experienced one of the wettest autumns on record. Thats likely to bring about an output drop of close to 5m tonnes.”

Estimates based on a planting survey of 4000 farms, showed that wheat production alone will be down 4m tonnes, Mr Butler added.

“We will be unlikely to be a net exporter of cereals and cereal products, which will have a devastating impact on the whole grain chain.”

The net effect, said Mr Butler, is that 4 billion will be wiped off the UKs gross domestic product, putting the whole cereal industry into recession.

The government should release 57m worth of agri-monetary compensation to offset the effect of the strong Pound, which has devalued farm subsidies.

“Id be extremely disappointed if the government doesnt follow the example of every other government in Europe and release the compensation we are due.”

Strelings strength has led to a 6.5% drop in IACS payments for 2001.

Mr Butler said a base area overshoot triggered by mixed farmers putting temporary grass into setaside could further cut payments by 4%.

With modulation being introduced this year, the compound drop in area aid payments could be as high as 13%.

French and German farmers meanwhile are enjoying higher payments and grain prices than they were last year, he said.

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