Beef sector faces subsidy cuts

Projections based on current proposals for reforming the Common Agricultural Policy could spell big problems for the Scottish beef industry according to SAC beef specialist, Douglas Bell.

Speaking in Bridge of Allan yesterday, Bell said that there could be a massive shift in support cash to areas of Scotland which have traditionally been considered less productive.

The big problem, he pointed out to members of the Scottish Beef Cattle Association, was that currently most of the beef cows in Scotland are in the productive areas such as the North-east and south-west of Scotland and these areas would suffer badly. The other problem is the likely reduction in the overall support for the beef sector. Bell admitted he was “extremely nervous” about what state the EU budget might be in by the time the new CAP came into being.

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He referred to the overall financial situation in Europe as worrying and said that further instability could bring about a major reduction in the pot of money for farming if wider aspects of the economy continued to be unstable.

Even if the EU budget is held at its current level, the new system proposed would see major reduction in income for Scottish beef producers.

He instanced a typical family farm with a beef unit and with a current single farm payment income approximating to €327 per hectare. In an extreme example of how this could be reduced, he pointed out that if all the Scottish farm support money was spread evenly across the country the figure would be €125 per hectare. If the EU subsidy money coming into the UK was spread across the whole country, the figure would be €247 per hectare, still well below the current level of support.

Under the first CAP reform proposals put forward by Brian Pack last year, the support level, including the top-up figure proposed, would only come to €246 per hectare and the more recent revision of Pack would see a figure of €213 per hectare, all below the current level of support.

To his somewhat subdued audience he then referred to the latest set of financial figures for the beef sector produced by Quality Meat Scotland and bluntly stated: “The industry may look to be in good heart with fantastic end prices but input costs are rising steeply and the whole industry is still heavily dependant on subsidies.”

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