Farmers lose under extensification premium &#151 survey

30 March 1998

Farmers lose under ‘extensification premium’ &#151 survey

By Boyd Champness

FARMERS adopting the Extensification Premium – a subsidy introduced to aid the environment by encouraging farmers to run less stock – are economically worse off then their counterparts, according to a survey.

Harper Adams College is a carrying out a survey on the Extensification Premium scheme, which is now into its third year.

The college examined 43 farms in the Shropshire Hills Environmentally Sensitive Area. It found that a typical farmer could be more than £7,000 a year worse off by stocking at the lower rates required under the scheme.

To receive Extensification Premium payments, farmers must stock at under 1.4 livestock units per hectare, returning an estimated gross margin of £450 per hectare.

Farmers who stock two livestock units per hectare forego the schemes payments, but are more than compensated for the loss by payments under the Suckler Cow Premium or Special Beef Premium Schemes. Taking these payments into account, gross margins of nearly £550 per hectare are achievable.

Graham Tate, senior lecturer, said: “The current system of headage payments means farmers who want to help the environment are penalised. And, it looks as though things will get worse if the current Agenda 2000 proposals are implemented.”

The council of farm ministers meets in Brussels tomorrow to formally discuss, for the first time, the Common Agriculture Policy (CAP) reforms outlined in the Agenda 2000 package.

Environmental groups have been particularly critical of the proposed reforms, saying farmers should have to meet certain environmental conditions before receiving payments.

The environmental lobby argues that production support for farmers is likely to be outlawed following the next round of World Trade Organisation talks in 1999, and that environmental and social payments are the only ones likely to be acceptable under WTO rules.

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