No Return to Headage Based Beef Subsidies

UK - Farmers who expect coupled subsidy payments to be re-introduced after the current phase of CAP management is completed in December 2012 will be diverted from the tough task of getting their businesses to work profitably before the inevitable disappearance of SFP.
calendar icon 13 March 2007
clock icon 3 minute read

So says the National Beef Association which is alarmed at the number of breeders and finishers who are still hoping for a return to direct, headage based, support.

“Their reasoning is that it is impossible for beef farming to become profitable so, in order to maintain domestic supplies, the European Commission will be forced into a U turn on decoupling and will reinstate new payments for suckler cows and slaughter cattle animals in say 5-6 years time,” explained NBA chairman, Duff Burrell.

“We are worried about this for two reasons. Firstly it is obvious that the Commission remains determined to sweep away the remnants of coupled systems that still linger in some EU countries – and hopes to achieve this during the health check review of the CAP which begins next year.”

“Secondly those farmers who are mistakenly clinging to the thought that direct payments will eventually return will not be giving the difficult job of getting their businesses into a position where they can earn profits solely off market income the attention they should be.”

“This is making it less likely that they will arrive at the end of 2012 with their businesses still intact or be in a position to take their farms forward in 2013 and beyond.”

The NBA wants to make it clear that the European Commission warned earlier this month that it would strip the CAP of the last vestiges of coupled payment before the end of 2012 and it expected that the only public money that would be directed to farmers from 2013 would be to encourage specific environmental management practices under an extension of Pillar 2.

“The position as we see it is this. When direct SFP ends in December 2012 farms will have prepared for it by either lining themselves up for environmental payments – or else have constructed an efficient and profitable business based on market income. There is no way that a return to headage payments enters this calculation,” said Mr Burrell.

“This is why the Association has paid so much attention to encouraging farmers to identify and embrace more efficient practice as well as work hard at identifying new ways of coaxing more income out of the market.”

“Those who prefer the environmental route should prepare for it now while there is still enough SFP in the system to convert their farms so they can survive by carrying much less stock than farms which have decided to commit to being a thriving commercial outfit.”

“Retailers and processors must also take note because even efficient businesses will not be able to survive unless there is a 40-50p per dwkg lift in market income – and if slaughter cattle prices are still short of this target then there will be less, professional, beef farmers turning out large numbers of animals and more farms on which very low numbers of cattle will be used just to encourage birds and plants or maintain the landscape.”

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