THE importance of subsidies for Scotland’s beef producers has been underlined with a survey showing one third of farmers would reduce their cattle numbers if, as is quite possible, support payments fell by 10 per cent.
The survey, which was carried out by NFU Scotland, also revealed that deeper cuts in support would dramatically increase the rate of decline in the industry with one third of respondents saying they would go out of beef production altogether if there was a 30 per cent cut in subsidy payments.
The survey, which attracted 268 respondents, also looked at the effectiveness of the Scottish beef calf scheme which provides direct support for breeders of beef cattle. A coupled payment of this kind is an option under future support arrangements within the next common agricultural policy (CAP).
When asked about the role that a coupled payment could play on business decisions, a value of €50 (£42) per calf would see half of respondents retain cow numbers and 6 per cent actually increase their herd size.
One in five of respondents would increase their beef cow numbers if the coupled payment rose to €100 per head.
However, another policy of the next CAP; that of limiting the top payment any individual farmer can receive, might have a negative effect on the Scottish beef sector.
Almost one in ten of the respondents would breach the CAP limit of €150,000 above which support reductions are made. If a 10 per cent penalty is imposed for those receiving more than the threshold level, half the big scale producers would cut their herd numbers. If the penalty is set at 20 per cent, half would cut numbers and one quarter would sell their cows.
Commenting on the survey, Union president Nigel Miller said that, with 25 per cent of Scotland’s agricultural output coming from beef cattle, the sector was the cornerstone of the food and farming sectors. He added the beef industry also provided wider economic benefits to local economies.
“It is clear from our survey that the scale of any reduction in basic support payments will have a massive influence on future business commitments to producing beef,” he added.
“Coupling is an option.n This survey highlights that if pitched at an appropriate level and sitting alongside a stable area payment, a coupled payment for producing beef can stimulate production.”