IB fails to stop likely fall in barley price

By Robert Harris

BARLEY growers face a sharp drop in the price for grain delivered into intervention due to the strong Pound and delivery delays.

The Intervention Board has failed to read the market, and its attempts to reduce delays are too little too late, the industry maintains. The catch is that farmers are paid for their entire intervention tonnage at the price on the day their first load is delivered into store, not when it is tendered.

With Sterling entering a confirmation period last week, a Green Pound revaluation is likely on May 3. Merchants are trying to deliver at least one load from as many growers as possible before May 3 to secure a pre-revaluation price. But few will beat the deadline and could face losses of £3/ tonne.

Even growers who tendered this month may miss out. More than 1.1m tonnes of barley has now been offered into intervention. But less than 300,000 tonnes has actually been delivered, says Jamie Day of merchant body UKASTA.

The problem lies mainly with the Intervention Boards policy of opening just a few stores at a time, regardless of where tenders originate, he adds. “Lorries are hauling grain from Yorkshire to Norfolk, and hauling more grain back again.”

Intervention Board officials insist that haulage is not a concern. “Barley has to travel,” says an IB spokesperson. “But 60% of the journeys are less than 100 miles, and 32% under 50 miles.”

According to Mark Buckingham, economist for Banks Agriculture, the amount spent on haulage would pay for several years worth of storage. And delays are exacerbated by the excess paperwork involved.

“The Intervention Board is disappearing under an enormous heap of paper. It is struggling to get anywhere near its target date for movement instructions,” Mr Buckingham claims.

The IB should advise on barley allocations within 10 working days of receiving an intervention offer, he explains. “This week we received instructions for one contract a month afterwards.”

The IB has taken on extra staff to try and get first deliveries in to set the price. But with almost 130,000t of barley offered in the week ending Mar 19, “quite a lot” is still coming in, it adds.

According to the NFU, lessons need to be learned. It is pressing the IB to allow co-ops and merchants to designate their own intervention stores, reducing or eliminating the need for haulage. “The regulations are all in place. But it will probably be too late do anything this season,” says cereals adviser, Jonathan Pettit.

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