Low grain prices threaten UK economy

19 July 2000



‘Low grain prices threaten UK economy’

By Mike Stones

THE UK grain industrys 90 million contribution to the balance of payments could turn into a 400m deficit overnight.

If farmers to put an additional 40% of land into voluntary set-aside as cereal prices fall, the national economy would be damaged, HGCA chairman Tony Pike has claimed.

“The prospect of wiping almost 500m off the UKs balance of trade certainly puts the 34m claim for agrimonetary compensation into perspective,” Mr Pike told visitors to the HGCAs annual Harvest Lunch in London.

Once lost, hard-won grain export markets would be difficult or impossible to recapture, he warned.

Neither was it just grain export markets that would suffer if farmers boosted set-aside.

“For an industry that currently exports 40% of its output in one way or another, this would be damaging to the national economy as well as to the rural economy,” said Mr Pike.

“It would lose us valuable markets and cripple the supply industry in the process.”

A 40% increase in set-aside would slash UK farmers spending on inputs by up to 270m.

That would reduce grower contributions to the HGCA by 3m and severely cut research, he added.

Junior farm minister Joyce Quin said that UK farming had already received 170m-worth of agrimonetary compensation, and would receive a further 57m in the autumn, subject to stable exchange rates.