Split over single farm payments (From Gazette & Herald)

Split over single farm payments

SPLITS continue to appear within the agricultural and advisory organisations as each gets down to considering the potential impact of a single farm payment, with its two alternative methods of delivery.

The alternatives in the melting pot are fairly clear:

A regional average payment, which is calculated by adding up all the subsidies paid in a region, such as south-west or north-east; after the required deductions for modulation, the resultant figure is divided by the total number of acres in that region and paid out to each farmer according to the area he farms.

The historic method looks at each individual farmer's receipts from subsidy during the years 2000 to 2002; that figure is then averaged over the three years, subjected to the same deductions as in the other system, and then divided by the number of acres farmed during those years to give the average receipt per acre.

The historic method gives a huge variation in entitlements, from zero in the case of pig farmers and horticulturalists, through to some intensive beef units estimated at £1,000 per acre per annum.

Inevitably, there is a compromise route, which is a hybrid of both the mainstream auctions, which averages most of the subsidies in the form of a regional payment per acre and then cherry-picks a few for distribution directly to those who have produced the goods in the past.

Last week, as you know, I went down to the valuers' committee meeting to discuss the issue, and support was mainly for the historic method because it fairly reflects the past efforts of farmers, and there would be too many losers if the regional average system was adopted.

I confess that I was one of the dissenting voices, and do wonder what there is to be frightened of in the regional payment basis.

The voices raised in favour of the historic method smack a little of the vested interests of the larger producers who don't want to lose any of their subsidy receipts; but it seems to be at the expense of those who get less than the average payment at the moment, such as some upland farmers and those with extensive systems of farming.

To my mind, it is those very areas which need more support in order to stop depopulation of our hills and encourage more environmentally-acceptable practices.

A second argument in favour of the regional payment is that it would be very much simpler to introduce and operate.

I note that last week the farmers in the south-west voted in favour of the historic method, because some of their smaller intensive farms would be disadvantaged, but they also forecast that some 90pc of claims would be looking to establish a special need and go to arbitration for more money.

If this degree of appeal is repeated over the country, it could be ten years before every case is heard and the new entitlements paid out.

Last week, Northern Ireland was considering the hybrid option, whereby the Beef Special Premium payment was spread out over the region, but the other subsidies were calculated on the historic basis.

This seems to me, and to the National Beef Association, the worst of all worlds, whereby the livestock producer is once again disadvantaged.

The debate rages on, with some heat on all sides, but it has to come to a conclusion before the end of the year

I leave you with one further thought about the historic method, which no doubt rewards farmers for their past efforts; however the intensive beef farmer who will get £900 per acre for his 30-acre holding is under no obligation whatever to continue to produce cattle once the entitlement has been settled.

All he needs is 30 acres of moorland, somewhere in the same region, to maintain a comfortable living thereafter.

Sink or swim in a grain pool

And now for something really controversial. Our grain correspondent, David Sheppard, and I have similar views as to the best use of our talents within the agricultural sector.

I accept that it is fashionable within the Brussels committee rooms to promote co-operative ventures amongst farmers, and it certainly does seem to provide a fast track to grant aid.

But sadly, in my lifetime there doesn't seem to have been a great success rate for farmer-controlled ventures, right from the old Fatstock Marketing Corporation days through Viking Cereals up to the recent charade in the milk processing industry.

There is no doubt that we have the best farmers in the world, and what they are good at is producing food, be it in the form of arable crops or livestock.

That is the very reason for my crusade to retain livestock auction markets, or at least professional livestock traders who can fill the specialist marketing role that has been tried mostly unsuccessfully by co-operative ventures over the years.

The great grain pool debate is similar in principle.

On the one hand, you have the co-operative stores which parade their farmer-controlled banner as though it gives free entry to greater profits by cutting out the middleman's expenses.

On the other hand, you have the commercial grain pools led by Gleadells, Banks Cargill, Glencore and including all the local merchants.

These independents provide a dynamic service to the farmers, but from the private side of the fence and with the object of making more money for everyone.

Nobody denies that these commercial operators need to make a profit, but the question to be answered is that whether in doing so they give more added value to the farmers' grain.

You may disagree and support the farmer-controlled ventures, but for me there is no substitute for individual flair, commitment and enterprise which one rarely finds in such organisations.

What thoughts has anyone else on the grain pool issue to put to the Stephenson-Sheppard camp?

EC refuses FMD aid payment

Although not yet rubber-stamped, it is reported on reasonable authority that the EC is likely to decide to withhold £700m claimed by the UK Government towards the cost of the foot and mouth epidemic.

In an incomprehensible about-turn, the Commission says that it cannot contribute to the cost of destroying 8m healthy animals under the "pre-emptive cull scheme" because, according to the small print of the relevant directive, payment can only properly be made for the slaughter of infected animals.

What the latest policy statements from Brussels fail to acknowledge is that the decision to carry out the pre-emptive cull was initially "recommended" by officials at the Commission's own food and veterinary office, in March 2001.

Once again, the EC has shown itself to be untrustworthy and unreliable, but sadly it is the British taxpayer who will have to pick up the bill.

As an aside, it is little wonder that one fails to find the detail in the small print of a European Directive, and I quote from a note from Holgate Illingworth which you will have heard before but bides repetition.

"There are 56 words in the Lord's Prayer, 297 in the Ten Commandments, 1,300 in the American Declaration of Independence, and 27,000 words in the EC Directive on Duck Eggs"

Foreign meat offer to Gazette

Without any explanation, an e-mail dropped into a Gazette & Herald computer last Friday from "Meat Importers" which were offering "Meat cuts from finest and qualified slaughter houses at Argentina and Uruguay - please send your requirements".

Perhaps we should respond, offering them similar meat, but this time from animals reared under proper controlled veterinary and environmental conditions.

Market report

Forward on October 21 were 108 cattle including 21 cows and 62 bulls; 405 sheep including 99 ewes.

Light steers to 137p from G I Marwood, Harome. Heavy steers to 104p from B Gray, Fryup, (ave 95.6p). Light heifers to 127p G I Marwood (104.8p). Heavy heifers to 133p from G I Marwood (107.04p). Light bulls to 110p from J M Richardson, Lastingham, (104.01p). Medium bulls to 123p from Mrs Towse, Welham, (97.5p). Heavy bulls to 116p from S Houlston, Great Barugh, (96.2p). Black and white bulls to 96p from C Leckonby, Pockley, (83.2p).

Standard lambs to 103.9p from J E Shepherd, Pickering. Medium lambs to 110.2p from W Smith, Salton, (104.7p). Heavy lambs to 108.9p from R Arundale, Cropton, (103.2p). Overweight lambs to 103.8p from J Wilkinson, Langtoft, (98.8p). Ewes to £55.50 from P & L Brewster, Great Habton (£31).

Updated: 11:59 Wednesday, October 22, 2003