Written Answers. - Agricultural Supports.
Colm M. Hilliard
Question:
126
Mr. Hilliard
asked the
Minister for Agriculture, Food and Forestry
the reason heifer animals do not qualify for the headage payments that are available for male animals; and the plans, if any, there are to include heifers in future headage payments.
[6812/96]
Colm M. Hilliard
Question:
127
Mr. Hilliard
asked the
Minister for Agriculture, Food and Forestry
the plans, if any, he has to consider the better distribution of CAP finance to give those farmers in the beef industry more equity.
[6813/96]
I propose to take Questions Nos. 126 and 127 together.
The EU beef regime has traditionally focused its support, through the intervention system, on male cattle. Accordingly, when the beef support system was reformed in 1992, it was decided to switch the emphasis away from market support through intervention purchasing and to compensate producers for the expected fall in prices by increases in the existing premium arrangements viz. the special beef premium and the suckler cow premium and by the introduction of the extensification premium. The increases in these premiums were deemed to be sufficient to compensate producers for the expected reduction in prices for all categories of cattle, including heifers. For example, the 15 per cent reduction in the intervention price over a three year period was expected to translate into a 13p-lb reduction in cattle prices. By way of compensation for this, the suckler cow premium was increased from £68.54 per head in 1992 to £140.76 per head over three years; the special beef premium was increased from £35.15 per head to £90.16 per head and made payable twice in the lifetime of each male animal. A new extensification premium was introduced and this is worth £30 per head on all qualifying animals on holdings with a stocking density of less than 1.4L.U-hectare.
It is evident from the scale of the increases in the premiums that they were designed to compensate for the expected fall both in steer and heifer prices. Premium payments to producers under all premium schemes in respect of applications lodged during a calendar year increased by about £250 million between 1992 and 1995 and this represents an increase of 20p-lb deadweight on all cattle (cow, bullocks and heifers) slaughtered annually in the country.
It is clear that the EU Commission and other member states would insist that if a premium were to be introduced for heifers it would have to be financed out of the existing envelope for premiums, which would result in reduced payments for male cattle. In view of this and of the fact that most producers have a reasonable mix of steers and heifers, the introduction of a heifer premium would not result in increased payments for the majority of Irish beef producers. Indeed, it is likely that a heifer premium would lead to lower premium payments for beef producers generally. This arises from the fact that if heifers were included in the premium system they would have to be included in the calculation of the stocking density and this would increase the stocking density on the vast majority of holdings. The inclusion of heifers in the premium system could lead in some cases to the nonpayment of the premium on otherwise eligible cattle because the stocking density on the holding would be pushed above 2.0L.U-ha and in other cases to the loss of the extensification premium because the stocking density would be pushed above 1.4L.U-ha. In general, the overall average stocking density in the country would be substantially increased thus reducing the national take from the premium system generally and, in particular, from the extensification premium.
As regards equity in CAP expenditure, the position is that CAP expenditure on the beef sector is reasonably proportionate to the sector's share of gross agricultural output in the European Union. It should also be noted that equity in CAP expenditure has also to take account of several factors, such as the level of capital investment and the manwork units required, which vary considerably from sector to sector.
