Lowest IACS sparks agmoney call

3 July 2001

Lowest IACS sparks agmoney call

By Tom Allen-Stevens

THE NFU has renewed its call for the Government to claim 34 million worth of agrimonetary compensation due to arable farmers.

The request follows the setting of the exchange rate on 1 July that determines IACS payments to growers for the 2001 harvest.

At just Euro1 = 0.608097, this is the lowest exchange rate growers have ever had to suffer, and has triggered the option for the Government to claim compensation.

“Under Agenda 2000, the cereal and set-aside payment for 2001 should be increasing by 7% to offset lower support prices,” explains HGCA economist Marsha Ribeiro.

“But because of the drop in exchange rates, UK growers will receive only a 4% rise.”

The low exchange rate is part of a triple whammy to hit IACS this year that could see payments reduced by almost 9% in total.

Modulation also takes effect, wiping a further 2.5% off the IACS cheque, and initial estimates indicate there may be a base area scale back of as much as 3%.

But compensation is unlikely since the money would effectively have to come from UK treasury coffers – rarely a source of income for arable farmers.

“Agmoney compensation from Brussels would be taken from clawback cash due to the treasury under the Fonteinbleu Agreement,” says Ms Ribeiro.

If compensation was paid, she believes it would be of about the same amount as that paid for the 2000 harvest – an initial payment of around 7 per cereal ha.

Stage 3 of the 1999 payments are still due at the end of this year – worth around 5.50 per cereal ha without match-funding from the treasury.

As much as 7.20 per cereal ha could still be paid for the 2000 harvest – payable in two instalments at the end of this year and next year.


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