Farmers may have to fund arable aid

12 October 2001

Farmers may have to fund arable aid

By Alistair Driver

FARMERS may have to make personal contributions to a fund to counter currency fluctuations that affect their incomes.

The fund could replace agrimonetary payments, which compensate arable producers when unfavourable exchange rates devalue farm subsidies.

Agrimonetary compensation is due to be abolished at the end of the year.

The Euro has prompted Brussels to drop the scheme even though the UK, Denmark and Sweden have not joined the single currency.

National Farmers Union deputy president Tim Bennett said the union would continue to push for continuation of the scheme.

“But to say this will be difficult is an understatement, as there is no support from the UK treasury, the EU Commission or other member stares.”

The scheme is far from perfect anyway. The UK has only claimed 783 million out of the 2bn available to it in the last five years, he said.

Mr Bennett has compiled a document, After Agrimoney – Options for British Farming, outlining the options if the scheme ends.

One controversial option under consideration is a government-supported income stabilisation scheme.

Farmers would pay money into a scheme which the government would match-fund. It would be used to smooth out troughs of currency volatility.

World Trade Organisation rules allow such a scheme, which is already being used in Canada and Australia, said Mr Bennett.

Mr Bennett acknowledged that the scheme could be unpopular with some farmers but said that all options needed to be examined.

“An income stabilisation scheme could be of benefit to farmers large and small,” his document states.

Mr Bennett said the problem would be resolved if the UK joined the Euro.

Other ideas include using risk management systems, such as options, although these are currently not well understood by farmers, he said.


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