Minister adamant: 11% cut in OTMSpayments to stay

11 July 1997

Minister adamant: 11% cut in OTMSpayments to stay

By Shelley Wright

FARM minister, Jack Cunningham, remains unswayed by farmer anger at the 11% cut in over 30-month scheme payments and has offered no hope that the decision might be reversed.

An NFU delegation of 25 farmers, representing all the unions regions in England and Wales, met the minister late last week to tell him how devastating the price cut, and the imposition of the 560kg ceiling, would be. The cut will bring payments down from 64.9p/kg liveweight to about 57.7p/kg for cows. Steers, bulls and heifers will continue to get the old rate, but only to 560kg.

The changes, which take effect from Aug 4, will save government about £17m a year. But the farmers told Dr Cunningham that an industry already in trouble, because of low beef prices and the strength of sterling, was now facing disaster.

They told him that the cuts would be most damaging for the suckler sector, with 40% wiped off the value of an 800kg beast, but dairy farmers would also suffer.

After the meeting, NFU president, Sir David Naish, said Dr Cunningham had failed to justify the imposition of the weight ceiling, but had stressed that, because of Treasury pressure, there was no chance of any more money.

"We know that 560kg was the average weight of animals going through the OTMS last year, but it totally disregards the beef sector and potentially pitches sector against sector," Sir David said.

Dr Cunningham accepted that suckler producers would suffer and had told the NFU that, if it wanted to, it could submit plans to introduce a differential to the scheme so that the value of heavier beef cattle, compared with cull dairy cows, could be recognised.

As FW went to Press (Wed) the NFU had made no decisions on whether to accept the ministers offer. A senior official said the only feasible way to pay more for heavier beef cows was to remove the ceiling. But, with the minister insisting that there could be no extra money, that would mean a reduction in the price paid per kg, lowering the price even further for lighter dairy culls.

He refused to speculate on any eventual decision from the NFU leadership, but added: "We have spent the past 15 months trying to keep the industry together and the last thing we need is to have splits between the beef and dairy sectors."

NFU deputy president, Ben Gill, said that farmers had already saved the Treasury money by putting cattle that would have eventually been involved in the selective cull through the OTMS. "Already government has identified 10,000 such animals and I believe that when the selective cull tracing is completed that could rise to as many as 30,000 cattle.

"Those animals got a lower price from the OTMS than they would have done from the selective cull and the unexpected saving for the Treasury should be put back into the OTMS immediately, alleviating any need for the cuts."

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