IN BRIEF
Pork producers spared 100% US import duty
By Philip Clarke
BRITISH producers have escaped the wrath of US trade representatives, who this week announced which products and countries they will hit with 100% import duties in retaliation for the EUs continuing ban on hormone-treated beef.
The move follows last weeks ruling by the World Trade Organisation that the US is entitled to impose levies on up to $117m (£74m) of EU goods, since Brussels had failed to lift its 10-year ban.
The original hit-list, issued by the US last April, identified about $900m (£573m) of EU goods, including 4000t of British pork worth £8m a year.
Ribs left off
The revised list is considerably smaller and UK pigmeat, supplied mostly as added value ribs by Malton Foods, has been left off altogether. This is seen as a reward for the UK government, which has consistently supported the right of the US to sell hormone-treated beef to the EU, which it believes to be safe.
Instead, the US has targeted France, Germany and Italy, which have the greatest voting power in Brussels and, as such, the best opportunity to change EU policy on hormones. Products affected include cheese, beef and canned tomatoes.
Denmark has also been singled out, with duties on its pigmeat exports to the US accounting for about 15% of the total levies being raised. This could have knock-on effects on EU pig markets.
Reaction in Brussels has been one of disappointment. "I do not dispute the right of the US to introduce measures, but I dont understand the point," said farm commissioner Franz Fischler. "I thought the US wanted to expand trade, not restrict it."
Mr Fischler maintained the US would be better off accepting an EU offer of compensation in the form of improved market access for other products. But US officials said this week that was not a long-term solution and they would only accept it in return for a firm date for lifting the ban.
The 100% import duties take effect on July 29 and come on top of $191m (£122m) levies already imposed following the EUs failure to amend its banana regime. *
Agenda 2000 tweaks?
FURTHER liberalisation of agriculture, beyond what was agreed in Agenda 2000, is anticipated as Brussels gears up for the next round of world trade talks in November.
Spelling out his priorities at this weeks council meeting in Brussels, Finnish farm president Kalevi Hemila said the aim was to strengthen the competitiveness of EU agriculture, while devoting more attention to environmental concerns.
Until recently, the official line in Brussels has been that the Agenda 2000 reforms would be enough to satisfy the other WTO signatories. But that appears to be slipping.
A communique released by the commission earlier this month speaks of the need for "further liberalisation and rule-making in the field of agriculture… creating better conditions for competitiveness". Launching the report, EU trade commissioner Sir Leon Brittan described Agenda 2000 as the starting point, saying CAP reform was a "continuous process".
But EU farmers body COPA insists there must be no departure from the policy agreed by heads of state in Berlin last March.
Young farmers group CEJA agrees. "Further changes would lead to more uncertainty and could seriously threaten some sectors of EU agriculture."
Meanwhile, the European Dairy Association says the dairy sector must take a low profile in the coming trade talks. Agenda 2000 reforms do not kick in until 2005 and any forced reductions in export subsidies, ahead of planned cuts in milk prices, would put the EU at a serious disadvantage. *
Capital allowance shock in NI
THE sudden withdrawal of 100% first year capital allowances has left many producers in Northern Ireland fearing higher than expected tax bills.
The move, due to a late change to the Finance Bill, has taken farmers and advisors by surprise, and many could lose thousands of £s.
The allowance was made, as part of the peace dividend following the Good Friday agreement, for small and medium-sized businesses for four years from May 1998 to promote investment.
However, it was provisional and subject to EU approval. Now only those investments with Department of Agriculture for Northern Ireland approval will be eligible for the 100% relief.
However, DANI has not yet published this list, and many producers have already made substantial investments, especially in tractors and dairy parlours, expecting to be able to claim 100% capital allowance in the first year. It could prove costly.
For example, if a £30,000 investment now attracts just the standard 40% capital allowance, rather than the full relief, tax will have to be paid on £18,000. At 23% this amounts to £4100. A higher rate taxpayer will have to find an extra £7200.
Both accountants and farmers in Northern Ireland are critical of what they see as a retrospective withdrawal of the allowance, claiming it was not clear it had been introduced on a provisional basis. Indeed, say some, DANI encouraged investment by highlighting the availability of the 100% rate.
"Its possible that we may be pleasantly surprised when the list of approved investments comes out," says William Martin of accountant Moore Stephens.
"The main sticking point now is the delay – we cant process tax returns. It is holding everything up, including some repayments."
A spokeswoman for the Inland Revenue said it had been clear that the 100% rate was only ever put forward as a proposal. Worried farmers should contact either their professional advisor or their local tax district, she advised. *
IN BRIEF
• SCOTTISH seed potato firm Alexander Harley Seeds is to buy the assets of the PBIC potato business from Monsanto for an undisclosed sum.
Included in the sale are the breeding programme, which is expected to remain in Cambridge, a range of commercial varieties and the PBI Fenton seed potato production operation, based near Perth.
The acquisition marks a "logical extension" to Alexander Harleys minituber production system and the Cygnet seed potato brand, says chairman Jim Harley.
• REPRESENTATIVE yields for double zero oilseed rape grown on set-aside land in Scotland which determine the minimum amount of crop to be delivered on non-food contracts have been set.
The minimum tonnage for winter oilseed rape in Scottish LFA regions is 2.27t/ha, and 0.97t/ha for spring oilseed rape. In non-LFA regions, tonnages are slightly higher, at 2.39 and 1.33t/ha respectively.
Growers expecting lower yields should contact local area offices. *
A new distribution network for speciality food group A Taste of the South East is proving invaluable for dairy processors like Ray Spiers (above), a partner in Turners Dairies near Worthing, West Sussex. Transport costs are one of the main factors limiting expansion for many farm-based businesses. Users pay a 20% levy on produce sold for the service, run by Chesswood Mushrooms and High Weald Dairies. The fleet of three vans serve more than 400 catering and retail outlets, six days a week.