Rape growers aid bonus
4 February 2000
Rape growers aid bonus
but hard times to follow
By Robert Harris
OILSEED rape growers will receive the full area payment for their 1999 crops, the first time in three years that no specific penalties have applied.
However, looking ahead, all area payments are expected to fall sharply in 2000/01 as the k continues to lose ground against the £.
Brussels confirmed the 1999 oilseed rate at the end of last week. It is higher mainly because last years EU edible oilseed area fell below the maximum guaranteed area struck with the US during the Blair House agreement. Prices also stayed within agreed limits around the world reference level.
As a result, there will be no repeat of last years oilseeds penalty. English payments will rise about 40% to just over £423/ha (£171/acre), allowing for a small arable base area overshoot penalty; Welsh growers and those in Scottish lowlands will receive slightly more.
Growers received an advanced payment – worth £184/ha (£74/acre) in England – in September. Almost as much again will be paid by mid-April, followed by another smaller cheque consisting of transitional agrimonetary compensation. English growers, for example, will receive £180/ha more aid, followed by another payment of £59/ha (£24/acre).
"This time last year growers could only look forward to final payments of about £100/ha," says Francis Mordaunt of farm business consultant Andersons. "This year, they will receive about £239/ha – and a lot wont realise they have that much to come."
But next years area aid payments could be hit by the weak k, he warns. This week, the k slumped to 60p, its lowest level yet.
Mr Mordaunt, and others, had assumed k1 would be worth 67p next June when forecasting 2000/01 payments. He is now basing calculations on a value of 62p (see page 26) and is prepared to come down further.
"There is real concern that payments could be hard hit and prices too – intervention values are also set in k and have to be converted. Harvest values are struggling to make £60/t in some areas."
Using his new figures wipes about 7.5% off forecast arable area aid values. An English cereal grower would receive just £210/ha (£85/acre), rather than £227/ha (£92/acre), and a Scottish lowland grower about £197/ha (£80/acre). However, agrimoney compensation already pledged by Brussels will remain at about £10/ha (based on 1999 area claim).
"The drop in aid values will trigger more compensation. But growers will only receive it if the UK government applies to Brussels for it," says Mr Mordaunt. Judging by recent events, that seems unlikely. *