Frozen green rates might stay

29 May 1998

Frozen green rates might stay

FROZEN green rates, which boost direct payments to UK farmers by £235m, may, contrary to expectations, remain during 1999.

Leaks from Brussels ahead of agrimoney reform discussions suggest a proposal will be discussed by the European Commission to change the name, but retain the mechanism.

A new "coefficient" would allow member states like Germany, France and Spain, who currently lose out because their green rates have been devalued, to shake off the 11.5% freeze and return to the market rate.

But countries like the UK, which has suffered several revaluations since the freeze was implemented, would be allowed to keep it.

Arable payments benefit by £130m, and beef and sheep payments by £70 and £35m respectively, says Sion Roberts, chief economist at the NFU.

"If the rumour is true, it is very good news. It will protect arable payments up until July 2000, and most livestock producers until Jan 2000."

"It is not exactly what we are asking for," says Mr Roberts, who points out that the NFU hopes to persuade Brussels to phase out the freeze gradually.

"But we did not think we were going to get full protection next year. Hopefully, even if the freeze does disappear with Agenda 2000, the £ will have come down, so there will be less pain if we do lose it."

James Baugh of the Home-Grown Cereals Authority welcomes the idea. "But only the UK and Sweden benefit from frozen green rates. Given the expense attributed to the system, I would be surprised if the other countries vote it through."

Meat and Livestock Commission economist Lesley Green warns it is early days.

"We would welcome anything that preserved the green rate. But we musnt jump to conclusions that this will happen. There are a lot of procedures to go through before the proposal is presented to ministers." &#42

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