Fears over low levels of malting barley

Production of barley for the Scottish whisky industry is now at a "dangerously low level" according to one long-term industry expert. Speaking in Edinburgh, Ian Keith said his worries on the tonnage that might be grown this year rose after seeing the acreage of winter wheat and oil seed rape sown last autumn.

According to the December 2010 census, both these crops increased in acreage by more than 10 per cent effectively reducing by some 13,500 hectares the acreage left for spring cereals including malting barley.

Only two years ago, there was a considerable overhanging tonnage of malting barley but this has melted away partly as result of increased demand from the whisky industry, "They (whisky distillers] are now ramping up their production," said Keith, who was speaking as the arable crops expert from the Agricultural Industries Confederation.

However, another expert in the grain trade, Peter Gray, raised question marks on the census figures and pointed out that the severe winter had taken its toll on some wheat crops that have been ploughed up after failing to germinate in the extremely wet soils of last winter.

He added that a number of crops of winter oats had also succumbed to the severe frost and again the most likely replacement crops would be spring barley.

Keith wanted to see more dialogue between the barley producers, the grain trade and the distillers to ensure sufficient supplies of the main ingredient of Scotland's national drink.

The other contributor to the potential shortage may be due to increased bankable returns from other cereal and oilseed crops for example wheat where it is possible to sell the 2013 crop on a forward contract.

Keith supported moves made by drinks giant Diageo in offering producers three-year contracts for malting barley linked to the futures price for wheat but said that even with an estimated 75 per cent of the expected demand for the malting market being on those or other shorter-term contracts, there was still room for establishing more secure markets in this period of extreme volatility in the grain market.

He believed the current upward swings and downward plunges in the futures trade would continue for the foreseeable future with factors far beyond the shores of Scotland influencing the market.

The AIC, which is the UK-wide umbrella body for the grain and supply trade, representing more than 95 per cent of the ancillary industries, has also this year, for the first time ever, produced a manifesto for the incoming Scottish Government.

In it they call for more cooperation between the various governments within the UK in presenting "positive policy commitments that represent the specific needs of each nation".Charlie Battle, the AIC policy officer, said this was very much in line with the thinking of the recent findings of the Environmental, Food and Rural Affairs committee of MPs at Westminster who called for more dialogue between Defra and the devolved nations.

"What we do not want to see is the devolved nations shouting from the sidelines," Battle stated.

The call was a recognition that CAP reform could affect the competitiveness of Scottish agriculture and so it was vital that the Scottish case was heard at Westminster and for the needs of the industry to be recognised in Europe.