Newspaper article The Journal (Newcastle, England)

`End Fat Subsidies to Supermarkets'

Newspaper article The Journal (Newcastle, England)

`End Fat Subsidies to Supermarkets'

Article excerpt

Byline: By Jennifer Mackenzie

Farmers are subsidising supermarkets and processors because they are using EU subsidies to make up for farm gate prices far lower than production, it is claimed.

The National Beef Association is telling beef producers to wake up to the threats and opportunities that will follow the switch to decoupled payments in January, and not to use their Single Farm Payment (SFP) to continue to make life easier for shoppers, supermarkets and slaughterers.

"For decades farmers have been falsely accused of growing fat on tax- payers' money because, contrary to popular opinion most, and occasionally all, of their subsidy income has been used to underpin the sale price of slaughter cattle and make beef cheaper in shops and catering outlets," NBA chief executive Robert Forster said at the association's Beef Expo 2004 event near Edinburgh yesterday.

"This cannot continue after decoupling is introduced in 2005 because their SFP support levels will not only be lower than the combined total of their previous SCP, BSP, SP and EP receipts but by 2012 it will be phased out altogether. Farmers who continue to use their support payments to routinely make up the gap between cost of production and market income will paint themselves into a financial corner from which it will be impossible to escape when SFP payments are finally withdrawn.

"The only possible response is to immediately establish a survival strategy in which SFP is not entered into the accounts as trading income but used as a capital fund that will assist cost reduction and help the business reach 2012 able to generate profit without any support income at all."

The NBA says the average hill suckler herd earned around pounds 270 per calf from the market in 2002/2003 but faced total costs per calf of pounds 365 ( leaving a loss of pounds 95 which was only countered by pounds 182 per head in subsidy. …

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