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Tuesday, 1 February, 2000, 11:05 GMT
Farmers win sympathy but no cash

BBC environment correspondent Alex Kirby reports on the plight of UK farmers who, it seems, cannot expect cash handouts to help them ride out the worst agricultural crisis in 60 years.

Farming in crisis
Farmers in the UK have gained a reputation for complaining loudly that they are earning too little and working too hard. The latest evidence suggests that, this time at least, they are right.

It can't just be about money
Tony Blair
There is no sign of any easing of the worst crisis to hit UK farming since the 1930s, and figures for 1999 from the Ministry of Agriculture, Fisheries and Food (Maff) suggest that for many farmers it is if anything worsening.

The figures, released inadvertently before publication by Maff, paint a picture of gathering gloom:

  • The output value of sheep, lambs and pigs has fallen by 11% compared with 1998

  • Net farm incomes fell on average by 16%, with pig and poultry farms especially badly hit

  • Hill farmers' incomes have fallen by 35%. So many are leaving the industry that productivity has actually risen by up to 8%

  • Those left on the land are having to work harder to stay afloat.

    Cause and effect

    The causes of the crisis have been known for long enough. They include:

  • The loss of the important Russian market after their economy's collapse

  • The continuing mistrust of British beef overseas despite the lifting of the European Commission's export ban

  • A bureaucratic stranglehold which - according to the body representing farmers in England and Wales, the National Farmers Union - unites Maff and Brussels in an unholy alliance to tie farmers in unnecessary red-tape.

  • More crucial than any of these, though, is the continuing strength of sterling.

    The NFU's chief economist, Sion Roberts, writing in Farmers Weekly, says things will probably get worse still: "A clear inverse relationship exists between the level of farm incomes and the level of sterling.

  • Pig farming: endangered
    "The recent rise in the value of sterling suggests there will be a further fall in incomes in 2000."

    In 1990, when the pound stood at 2.80 Deutschmarks, farm incomes were 2.5bn. By 1995, the pound was DM2.20 and farmers were earning 5.5bn.

    But by mid-1999, with the pound back at more than DM2.80, farm incomes were down to about 2.25bn. It is now well over DM3.10.

    Sterling performance

    Farmers are hit by the strong pound in two ways:

  • Agricultural support prices and direct payments made under the EU's Common Agricultural Policy are made in euros, which are worth that much less

  • Much of the UK's farming output goes to European markets, where sterling's strength makes it less competitive.

    There is at least a partial way round the problem - the use of the "agrimonetary compensation system", designed to protect farmers affected in this way.

  • Farmers protest over their plight
    The NFU suggests that compensation worth 362m lies unclaimed from a total of 450m available under EU rules. But the UK government resists going down that route for one simple reason.

    It was spelled out by the Agriculture Minister, Nick Brown, who said he could not be expected to claim every bit of money available in future, because to do so would be to load an extra burden on taxpayers.

    Every pound paid under the system affects the UK's annual rebate from Brussels under the Fontainebleau agreement.

    NFU conference

    The NFU is holding its annual conference on 1 and 2 February.

    In the case of the pig industry there are only weeks left to do something
    Tim Yeo,
    Conservative spokesman
    The Prime Minister, Tony Blair, addressed the farmers on the first morning, but while he offered help, it was not the immediate cash aid the industry believes is necessary.

    He said investment was easier to justify if it was tied to long-term change and reform. "It can't just be about money," he said.

    The Conservative agriculture spokesman, Tim Yeo, commenting on one of the worst-hit sectors, said: "In the case of the pig industry there are only weeks, not months, left to do something to help it to survive".

    For many farmers, it looks as if things are likely to get even worse before they can hope to get better.

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    See also:
    08 Nov 99 |  Wales
    Dairy industry sees exodus
    01 Dec 99 |  UK Politics
    Blair backs British beef '101%'
    07 Dec 99 |  UK Politics
    Organic farming receives cash boost
    11 Nov 99 |  UK
    UK farmers angry and dismayed
    01 Nov 99 |  Wales
    Blow for 'green' farming scheme

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