New orders set to raise throughput at Peninsula

5 February 1999

Direct aid cuts will mean smaller oilseed cheques

By Philip Clarke

OILSEED growers will receive area aid balancing payments of less than £100/ha (£40/acre) when cheques go out in March and April.

This is considerably less than last year, after a five-pronged attack on direct aid, made up as follows:

lA 6.2% cut for the UK exceeding its oilseeds base area in 1997.

lAn 18.32% cut for further over-plantings in 1998.

lA 7% cut for market prices exceeding the so-called world reference level.

lA further 1.8% cut in England (and 7.6% in Scotland non-LFA) for exceeding the total arable base area.

lA worsening green exchange rate used to convert the subsidies.

After these penalties, the rate of area aid for the 1998 crop falls to £298.83/ha in England, (30% below the full rate), and to £315.47/ha in the Scottish lowlands, (-34%). Welsh area aid is finalised at £308.98/ha.

Advance payments went out September, leaving just £99.33/ha to come in England and £92.01/ha to come in non-LFA Scotland.

Ministers have warned of further cuts next year, as EU oilseed plantings this autumn appear to have increased again.

"This underlines the importance of completing the Agenda 2000 CAP reforms as soon as possible on the basis of the commissions proposals," said junior farm minister Lord Donoughue. Under these proposals, oilseeds would be put on the same area aid as cereals, which would do away with the penalties system enshrined in the 1992 Blair House agreement.

At current exchange rates, this new single area aid would be worth about £294/ha – only a little bit less than growers received this season. Farmers could then plant as much as they like without the risk of penalty. &#42

Off-patent products

OFF-PATENT pesticides are set to take 70% of the global market in the next few years, according to a recent report by Produce Studies Research.

These generic products, mostly cheaper than more modern counterparts, accounted for 53% of worldwide sales in 1996, realising $17.8bn (£10.8bn). That share is expected to rise to $27bn (£16.5bn), or 70% of the market, by 2005, says consultant Bob Fairclough.

A key reason for the gain is the number of good active ingredients coming off patent early in the millennium, says Dr Fairclough. "This will give the generics industry access to a large number of advanced, low application rate systems." The list includes modern triazole fungicides and sulfonylurea herbicides, widely used by UK growers.

Rising research and development costs for new molecules are also driving the change, he adds. A new agrochemical costs $50m-$100m (£30m-£60m) and can take 10 years to commercialise. "Companies involved in fundamental research need large research budgets and global outlets. Generic pesticide producers do not have many of these significant costs." &#42

Scheme clears hill wool

MORE than 73,000kg of slow-selling hill wool was cleared at last weeks Bradford sale thanks to a new scheme from the British Wool Marketing Board.

Buyers of designated lots could choose to buy two further lots of the same grade, from the same depot, at the auction price.

More than one-third took up the option, clearing 37,000kg of red kempy Welsh and 36,500kg of Swaledale and Dalesbred wools.

"If we can continue to sell these amounts we may be able to avoid carrying stock into next season," said managing director, Ian Hartley.

lBy the end of January, wool sales totalled 31.93m kg from a projected clip of 49m kg. The sale indicator has barely moved from 66p/kg, 27% down on last year. &#42

New orders set to raise throughput at Peninsula

FARMER-owned Peninsula Milk Processors has won new orders which will double daily throughput at its Okehampton, Devon plant.

It will process 30,000 litres of milk a day by the end of the month. This means the plant, which began operations in September, has reached break-even point eight months ahead of schedule, says managing director, Geoff Lawrence.

A recent agreement to supply Brian Fords Discount, one of the regions biggest independent retailers, has helped. PMP, which boasts 100 members supplying 60m litres of milk, now hopes to attract a big multiple retailer.

All except Asda have shown interest, says Mr Lawrence. "It says it wants to help British farmers, yet it is telling us very little." The supermarket sources all its milk from Danish-owned MD Foods, he adds.

"The milk we sell is all British," says an Asda spokesman. "We are willing to speak to anyone." The company claims it is waiting for a proposal for costs and milk volumes, but expects PMP will have difficulty matching them.

Wessex Dairies, which had supplied Brian Fords until PMP stepped in, has sold its doorstep milk delivery business to Unigate for about £7m. The purchase will increase this high margin section of Unigates business by about 10%.

Meanwhile, Midlands Co-op, the leader in our table, is holding its price to the end of March. South Caernarvon Creameries has increased its monthly bonus from 0.3p/litre to 0.8p. &#42

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