Vol. 488 No. 4
166 Mr. Coveney asked the Minister for Agriculture and Food the action, if any, he proposes to take to address the 40 per cent cut in the 1997 ewe premium and its impact on sheep farmers' incomes; and the proposals, if any, he intends to implement to address the income problem on the country's 15,000 hill sheep farms. [6487/98]
The ewe premium is designed to compensate producers for the difference between the EU basic price and the average EU market price for sheepmeat. In view of this, it in inevitable that the rate of ewe premium will be low in a year, such as 1997, when average market prices are high. In effect when the ewe premium and average market prices are taken together, overall returns to sheep producers were roughly the same in 1997 and 1996. I accept, however, that in the latter months of 1997 prices for hoggets and cull ewes were relatively low and that the ewe premium did not fully compensate for this.
Nevertheless, I should point out that the EU sheepmeat regime recognises the position of the hill sheep farmer through the payment of a supplementary rural world premium of £5.51 on eligible ewes to producers in disadvantaged areas, where all hill sheep farmers are located. In addition, these producers also receive a headage payment of £10 per head on the first 200 ewes/hoggets under the disadvantaged areas scheme. Towards the end of 1997, I sanctioned an additional £2.5 million in extra headage payments to assist sheep producers in disadvantaged areas. These supplementary payments should help to compensate hill sheep farmers for the lower prices they received from the market in 1997.
As far as the income position of sheep producers is concerned, I am aware of the current difficulties arising from the overhang of 1997 season lamb on the market. In response to representations which I made to the EU Commission, a scheme of aid for private storage has been agreed by the Sheepmeat Management Committee 6 March. I am confident that this measure, if fully availed of by the factories, will play a significant part in restoring market confidence to the sector.
I have also established a forum, representative of the industry as a whole, to examine the wider challenges facing the sector, including the production and marketing patterns best suited to our conditions.
