Overcoming livestock support cuts

Swingeing cuts to agricultural subsidies are set to kick in. Picture: Phil Wilkinson

Beef and sheep producers looking for ways of alleviating what looks set to be the most swingeing set of support cuts ever to be imposed on the industry flocked to yesterday’s “Planning for Profit” road-show in search of a lifeline.

And the packed meeting, organised by Quality Meat Scotland, heard that, although there was no guarantee that improvements in farm technical performance would fill the hole left by the probable cuts in EU support, the best way of filling the gap was to go for top-tier efficiency.

Outlining how the support system was likely to work in the future, Douglas Bell, senior agricultural policy consultant with the SRUC, Scotland’s Rural College, said that, although it was difficult to draw up plans before all the details of the new scheme were known, farmers should act now – as leaving planning decisions until things were certain could be too late.

He told the meeting in Perth that, although the cuts in overall budget had been offset to some degree by the EU convergence top-up, the “flattening” of support payments by 2019 as outlined in the current consultation would create considerable challenges, especially for those in the livestock sector.

And although national statistics had shown that well-managed beef and sheep farms could just about make a profit in a good year, Bell stated that the recent trend to wetter seasons had knocked a considerable hole in returns, leaving livestock producers far more reliant on support payments.

He warned that, as well as the likely cuts, there were several other areas of concern for producers. Amongst these were complications over the issuing of entitlements, extra cross-compliance and greening issue regulations – and the fact that possible delays in implementation of the new system could knock on into hold-ups and disruption in the rolling out of payments after the new regime was introduced.

Expressing a personal opinion on the current proposals, Bell said that he took issue with the use of a two-region model for the area payments, and he believed that the rough grazing land should be further divided to better support producers on more productive hill land.

He also believed that the proposals put forward were likely to lead to the extinction of slipper farmers – a major aim of the reform which had arisen in Scotland. However, he said that, as they stood, there was a real risk of the regulations encouraging a new breed of “soft-shoe” farmers – who undertook minimum levels of activity – to evolve.

But he also reminded producers not to ignore Pillar 2 support – stating that although it was no panacea, prior experience had always shown that it had been the early birds that caught the worms here.

Also addressing the road-show, economist Peter Cook warned that, despite the threats to profitability from the falling support levels, simply dropping the suckler cow herd was seldom likely to be a route to improving the figures.

“Producers need to look closely at the effects of any moves on the overall business – and simply getting rid of the cows won’t result in major savings on the fixed-cost front,” he said.