Oilseed growers face massive cut in area aid

Thursday, 26 March, 1998

By FWi staff

OILSEED rape growers face a £45m cut in this seasons area aid payment, FWi has learned.

A yet-to-be-released report from the Home-Grown Cereals Authority (HGCA) forecasts a potential 21% reduction in European Union aid because UK farmers are growing too much rape. According to HGCA economists, growers face a likely 15% cut in aid for this year and an additional penalty of 6.62% carried forward from last year.

The HGCA figures will be published early next week. But preliminary estimates of this seasons plantings from the Belgian-based grain trade association, COCERAL, already point to a massive overshoot in the UK rape area. COCERAL analysts believe UK farmers have exceeded their Maximum Guaranteed Area of 350,000ha (867,000 acres) by as much as 150,000 ha (371,000 acres).

Even accounting for a minimal Green Rate revaluation in May, that means a total reduction in aid of at least £45 million – equivalent to £90/ha (£36/acre) for growers in England who will receive nearer £337/ha (£136/acre) rather than the anticipated £427/ha (£172/acre).

Farmers in Scotlands non-Less Favoured Areas face even bigger cuts. They must contend with a possible reduction of £103/ha (£40/acre) from £492/ha (£199/acre) to just £389/ha (£159/acre).

“These are very early estimates, but this kind of reduction is looking increasingly likely,” confirmed an industry insider. “The eventual cuts could be even worse because the high price for UK rape could trigger a price penalty as well.”

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