Recent Issues in Farming, and the Future

The outlook for the year ahead, according to recent predictions, continues to show a sorry picture for farming, but have announcements made over the past couple of months come just in time to bring some much needed relief to the farming industry ?

It has recently been announced that MAFF is to pay £34.5 million of Agrimonetary Compensation to arable farmers. This is being funded in part by the Government and part by the EU, to help dilute the affect of large exchange rate fluctuations on direct aid. This news, in conjunction with the additional Agrimonetary Compensation being made in respect of the 2000 harvest year, would have the following affect on a farmer growing, say, 500 acres:

2nd tranche for 1999 harvest 500 acres at £4.54 p/acre - 2,270 Compensation for 2000 harvest 500 acres at £2.98 p/acre - 1,490 An extra £ 3,760 of income by way of subsidies

On 28th November the 'Rural White Paper' was unveiled, although not specifically aimed at farmers, it contains proposals that would be of benefit to the farming industry, such as:

  • increasing the number of farmers market from 250 to 400;
  • reduction in road haulage costs through lower VED and fuel duties;
  • tailored business advice for around 15,000 farmers (3 days free);
  • additional aid to secure the future of abattoirs in order to support local markets, specialist producers and remote rural areas (£8.7m in 2001);
  • farm business diversification assistance.

This comes on top of the 'Action Plan for Farming', launched in March this year, which, following the Spending Review Settlement, gives an additional spending of around £500m. This has secured £66m of Agrimonetary Compensation for the dairy, beef and sheep sectors, of which two-thirds has been paid out, along with the removal of dairy inspection charges worth £1m each year to farmers.

Surely these measures can only be good for British Farmers, but unfortunately there are always down sides to everything. An example of which could not have had worse timing. The EU's proposals for reforms to the Sugar Beet industry. Proposals including:

  • freezing of current support prices;
  • reduction in quota by 115,000 tonnes over EU permanently;
  • sugar to be imported to EU from less developed countries on a duty free and quota free basis.
Naturally, British Sugar and leading growers are mobilising support to campaign against these proposals.
"Whatever the outcome of these measures, with current cereal prices still so low (although rising slightly), action still needs to be taken by farmers themselves" commented Ely office farming specialist Patrick Smith."They can do little about income streams except perhaps the move towards contract farming. But alternative arrangements to cut overheads can be achieved through sharing equipment and pooling resources, and where possible negotiating better deals with regard to inputs (especially with the ever increasing costs of fertilisers currently)."
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