Cull backlog bigger than forecast
More cold storage sought in BSE cull
Farms face sharp fall in profits
England's farmers harvest record profit
Farmers 'betrayed' by cut in payouts for cattle cull

Cattle cull backlog bigger than forecast

By Maggie Urry Financial Times ... Friday September 27 1996

The government admitted that the backlog of cattle awaiting slaughter under its scheme to eradicate BSE, or mad cow disease, appears "substantially" higher than earlier estimates of about 180,000.

Mr Roger Freeman, the public services minister, said the revised estimate was so high that the "figure does not seem credible". He added: "The emergency continues. It seems to be worse than we forecast."

Mr Freeman declined to reveal details of the estimate, derived from a survey of farmers. However, trade estimates suggest that the backlog may be as high as 300,000.

More than 550,000 cattle have been killed since May, when the government began killing cattle over 30 months old in an attempt to eliminate bovine spongiform encephalopathy from the national herd.

Mr Freeman, who is in charge of the cull programme, said that the government was thinking of increasing the rate of culling by contracting refrigerated ships to provide storage space for carcases.

Mr Freeman said the government was considering accepting National Farmers' Union proposals for a queuing system for cattle going to slaughter.

He added that the government's target of clearing the backlog by Christmas was still achievable. Officials will spend the next few days trying to understand the reasons for the size of the new estimate.

The rate at which animals are being slaughtered has increased from 23,000 a week in mid-August to 35,000 this week. It is expected to rise to 55,000 a week.

There is evidence that the increase in Creutzfeldt-Jakob disease, the degenerative brain condition which has been linked to BSE, may well be real rather than simply the result of doctors looking more carefully for it, a study by the Office of National Statistics suggested. Cases of CJD have risen from about 20 to 30 a year in the early 1980s to the 30 to 50 range since 1989.

Farms face sharp fall in profits

By David Brown, Agriculture Editor

Daily Telegraph ... Friday 27 September 1996

Farmers were told yesterday to "plan for leaner times" as their profits looked set to fall over the next few months from last year's record levels.

The beef crisis, falling world prices for grain and proposed cuts in EU subsidies were blamed. The accountants Deloitte and Touche Agriculture said the money-spinning days that had boosted farming fortunes since 1992 were coming to an end. Profits were expected to fall by more than two-thirds this year to an average of £42 an acre.

This compares with record average profits of £145 an acre achieved last year with high prices for cereals, potatoes and other vegetables. This was 29 per cent better than the previous year. The beef, dairy and sheep sectors also performed well. Profits were boosted handsomely by EU subsidies, mainly in the arable sector.

The company said this performance was due to an exceptional combination of circumstances and was "unlikely to be repeated". These conditions produced record overall UK farm profits of £4 billion, £1 billion higher than the 1994 figure. The amounts are based on the accounts of some of the firm's best farming clients, covering more than 200,000 acres of farmland in England and Wales.

Vincent Hedley Lewis, national partner at Deloitte and Touche Agriculture, said farmers would have to cut their production costs further and "plan for an increasingly volatile world where prices and political decisions can reduce profits". The impact of the beef crisis on beef and dairy farms had to be taken into account, he said. Wheat and barley prices could fall by 15 per cent due to large harvests.

If the EU carried out its threat to reduce arable area subsidies by seven per cent and overall costs rose by three per cent, as expected, this would hit profits. The National Farmers' Union of England and Wales was in broad agreement with the figures yesterday.

John Malcolm, chief economic adviser of the NFU, said: "The livestock sector alone has been severely affected this year. A lot of beef cattle are produced on dairy farms and so there has been an impact there. Potatoes which were fetching £200 a ton at the farm gate this time last year are now selling for about £60 a ton. That's a big drop."

More cold storage sought in BSE cull

by Valerie Elliott, Whitehall Editor

The Times ... September 27 1996

The Government is urgently considered hiring freezer ships and more cold-storage warehouses to clear the 200,000-plus backlog in the battle against BSE.

Roger Freeman, Chancellor of the Duchy of Lancaster, admitted yesterday that the Government was failing to meet its targets for the cattle cull. Delays have been caused by the shortage of cold-storage space to house the unrendered cattle carcasses before incineration.

The Intervention Board has now drawn up a list of free refrigerated space throughout the country and is negotiating the possible lease of at least two refrigerated ships. Last night a Whitehall source sug gested that one ship might be docked in Belfast harbour and another at docks within easy reach of the South West of England.

Last night Mr Freeman declined to reveal the precise figure of the backlog, but it is "substantially higher" than the previous backlog of 180,000. Sir David Naish, NFU president, said the NFU had always been concerned that the Government was underestimating the backlog.

"The Government target for a UK throughput of 40,000 cattle a week by mid-October must be increased substantially ­ and earlier ­ by using every possible means of cold storage and direct incineration. Red tape and lengthy environmental assessments must not stand in the way of greater efficiency."

England's farmers harvest record profit

by Jon Ashworth

The Times ... September 27 1996

Farmers in England have just closed their books on their most profitable year, thanks to a combination of high prices for produce, world shortages and EU aid payments. But celebration would be premature: the bad news is, it is all downhill from here.

Plummeting wheat and potato prices, and a slump in beef sales, are set to take their toll of farming profits this year, according to a study by Deloitte & Touche, the accountant. But conditions are still better than in the late 1980s and early 1990s, when agriculture came under severe pressure.

Last year, average net farm income increased 29 per cent to a record £363 a hectare, Deloitte & Touche found. Income ranged from £717 a hectare, for the most profitable farms, down to £104 a hectare.

Much of the gain was through sharply improved prospects for wheat and other combinable crops, which account for 62 per cent of typical farm production in England. Grazing land, mainly dairy farming, accounts for about 14 per cent.

David Turner, a senior manager with Deloitte & Touche Agriculture at Cambridge, said world grain shortages and high oilseed prices had fuelled farming incomes. The pound's weakness had made British produce more attractive to overseas buyers.

The figures do not include the impact of the BSE scare, which struck late in March, close to the end of farmers' financial years. The dairy sector had a "pretty good" year, helped by higher milk prices, while sheep and pigs had shown an improvement.

Disappointing world grain harvests had boosted sales of wheat, the UK's biggest crop. China showed a huge upturn in demand.

Mr Turner said better farm management played a big part in the gains.

Farmers 'betrayed' by cut in payouts for cattle cull

By David Brown, Agriculture Editor Electronic Telegraph

FARMERS accused the Government of "betrayal and incompetence" over the beef crisis yesterday after the EU cut 10 per cent off their compensation for culled cattle at Britain's request.

The cut, approved by the EU Commission's beef management committee in Brussels, will save the Treasury millions of pounds a year on the bill for the destruction of all cattle more than 30 months old. The operation was designed to reassure consumers that no beef infected with mad cow disease will enter the food chain.

It means that farmers expecting 500 for a slaughtered animal will get 450. Since March 550,000 cattle have been killed under the scheme, more than double the number expected by the Government. Although the EU meets about 70 per cent of the cost of this cull - which is separate from the "selective" cull of up to 147,000 allegedly high risk animals which was suspended by the Government last week - Britain pays more than 50 per cent because some costs are deducted from its EU rebates.

Sir David Naish, president of the National Farmers' Union of England and Wales, protested about the cut to the Prime Minister and to Douglas Hogg, Minister of Agriculture. Relations are now at their lowest between farmers' leaders and the Government over the crisis. Sir David said: "Through no fault of their own, tens of thousands of farmers, holding back hundreds of thousands of cattle on their farms, not only face the mounting costs of winter feeding but also the prospect of lower returns when their cattle are finally slaughtered. Farmers will consider that betrayal has been added to incompetence."

Only 24 hours earlier Roger Freeman, Chancellor of the Duchy of Lancaster, admitted that the Government had got its sums wrong about the backlog of cattle awaiting destruction in the over-30 month scheme. The Government thought it was dealing with a backlog of 170,000 cattle - but the figure is nearer 450,000 according to informed sources.