Pigs fare worst in bad year for EU farmers

20 April 1999

Pigs fare worst in bad year for EU farmers

By Philip Clarke

BRUSSELS – Pig-producing countries led the fall in European Union farm incomes in 1998, according to newly-published figures from Eurostat.

Denmark suffered the greatest drop of 18%, closely followed by the UK at -16% and the Netherlands at -12%.

Most other member states also saw a reduction in farm profits, with the exceptions of France (+1%), Germany (+1%) and Luxembourg (+2%).

Overall, the 15 European Union (EU) member countries suffered a 3.9% decline in farm incomes, following on from the 2.6% fall in 1997.

“But this should be viewed against three years of appreciable growth, which reached its highest level for 20 years in 1996,” said a spokesman.

Eurostat offers two main reasons for the downturn.

The first is that average farm-gate prices dropped 5% in the EU last year, hitting the value of output.

Pig farmers bore the brunt of the market collapse, with a massive 27% price fall, while livestock farmers in general saw 13% trimmed from receipts.

In addition, the value of direct subsidies to farmers throughout the EU fell by over 6% in 1998.

These losses were only partly offset by a 1.5% increase in arable and livestock production, and a 1.7% drop in the use of farm labour, notes Eurostat.

Despite the downward trend, the analysis shows that, for the EU as a whole, farm incomes are still some 12% above 1990 levels in real terms.

But Sterling is now so strong that UK farm incomes are now 20% below their 1990 levels.

Agricultural markets will remain depressed for some time to come, forecasts the Paris-based Organisation for Economic Co-operation and Development (OECD).

The protectionist policies of certain countries and high support prices have led to over-supply, while intervention stocks now overhang the market.

The danger is the EU and USA will be sucked into an export subsidy trade war, leading to further distortions, says an OECD report released this week.

The European young farmers group, CEJA, has urged Brussels to take the latest income figures into account when finalising the details of the Agenda 2000 reforms.

“Certain sectors have been especially hard hit over the last year,” said CEJA president, Arnold Puech dAlissac.