OSRoutlook grim

6 March 1998

OSRoutlook grim

OILSEEDS face a troubled future unless Agenda 2000 proposals are introduced gradually to give growers and industry time to adjust.

Several proposals affected the sector, the main being the introduction of an area payment common to cereals, oilseeds and protein crops, said Carl Hausmann of French group CEREOL.

Cereal aid payments would rise by 22%, while those for oilseeds would drop 30%. Lower cereal intervention prices, and an estimated 8% increase in oilseed rape prices due to world demand, would reduce the resulting differential. But he reckoned oilseed rape growers would still receive 9.5% less income than now, whereas cereal growers would get 6% less.

Under Agenda 2000 proposals, compulsory set-aside would be fixed at 0%. Industrial oilseed could still be grown on voluntary set-aside land, but it would receive area payment rather than set-aside premium. "The elimination of set-aside will have a significant impact on non-food rapeseed."

Overall, the reduced aid levels could see production of oilseed rape fall in Europe by about 20%.

To overcome that, subsidies should be cut slowly, giving time for oilseed yields to be increased and offset a sudden switch to cereals. More specific measures could include :

&#8226 Incentives to encourage crop rotation and diversity.

&#8226 EU to fund research and development on oilseed yields.

&#8226 An independent renewable resources scheme to aid industrial cropping.

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