EU budget cuts may cost sheep farmers fortune
EU budget cuts may cost sheep farmers fortune
By Alistair Driver
UK SHEEP farmers could see millions of pounds wiped off their income because of cuts forced on the EU sheepmeat budget by the BSE crisis, sheep industry leaders warn.
Leaked preliminary details of a sheepmeat regime reform package show the EU Commission wants to introduce an "annual, single and fixed" ewe premium of k21 (£13.21).
The proposed reforms, which also include a k7 (£4.30) premium for sheep in less favoured areas, would simplify the current "deficiency payment" system, which varies with market prices.
Last years sheep annual premium paid UK farmers just £10.73 a ewe, a third down on 1998 – a loss to the industry of £100m.
But k21, about £2.50 a sheep more, is still nowhere near enough, according to National Sheep Association chief executive John Thorley. He says k27-k28 is more realistic.
Farm ministers from the leading sheep producing countries even discussed k30-k33 at reform talks in November, he says. But that was before the full implications of the EU BSE crisis became apparent.
"The reason the figure is so low is that the whole of the EU agricultural scene has been thrown into chaos by BSE," says Mr Thorley.
The sheep industry takes second place to the "cattle world" and is set to pay the price of BSE through cuts to its budget, he adds.
The proposals still have to be finalised by the EU Commission, before being voted on by European farm ministers.
Politically, sheep producers are not helped by the fact that there is only a handful of major EU sheep producing countries, including the UK, Spain, France and Ireland, says Mr Thorley.
His fears are shared by UK farming unions, which have pledged to lobby for a higher budget. The Ulster Farmers Union, which has seen preliminary proposals, says the suggested rates are "totally insufficient" to offset the sectors problems.
NFU livestock adviser Kevin Pearce says the commission must not allow the BSE crisis to affect reform of the sheepmeat regime, adding that it would be wrong to base the SAP on "exceptionally low" recent levels.
"k21 is not enough if the commission is concerned about making the EU sheep industry sustainable," he says.
The annual ewe premium is currently based on a "basic price" set by the Commission. It is paid in three instalments, the third of which reflects market conditions over the preceding year.
Mr Pearce says it has failed UK producers by not accounting for the effect of the strong £ and by not changing the basic price in line with falling lamb prices. *