Any significant reduction in future support payments to Scotland’s beef farmers could spark a further sharp decline in the nation’s national herd.
A survey of beef farmers carried out by NFU Scotland painted a number of scenarios under new support arrangements and asked producers what impact that would have on their business. Faced with the likely situation of a 10 percent reduction in support payments, one third of the 268 respondents indicated that they would reduce cow numbers. Were support to Scottish beef farms to fall by 20 percent, two-thirds would cut their herds and at 30 percent, one-third indicated that they would go out of beef production altogether.
Scotland currently operates the Scottish beef scheme, which delivers a payment per beef calf to eligible producers. A coupled payment of this kind is an option under future support arrangements. When asked about the role that a coupled payment would play on business decisions, a value of €50 per calf would see half of respondents retain cow numbers and 6 percent increase herd size. A coupled payment of €100 would see 20 percent of respondents consider increasing their herds.
For Scotland’s largest beef producers, the introduction of degressivity (or capping of payments) on those businesses currently in receipt of €150,000 or more in total support will also have a major influence on plans. In the Union’s survey, 26 respondents fell into this category. At a capped reduction in total support of five percent, the number of cows kept in these large suckler herds would remain stable. At 10 percent, half would cut their herds and if degressivity removed 20 percent of support, half would cut numbers and one quarter would sell their cows.
NFU Scotland President Nigel Miller said:
“At 25 percent of our agricultural output, our World famous beef production is the cornerstone of our food and farming sectors. That said, our beef cow numbers are falling and future support arrangements cast a shadow over those who remain committed to producing beef.
“With new CAP arrangements coming forward in 2015, the Scottish support budget is faced with cuts and a long list of deductions. That list includes financial discipline, budget cuts, national reserve, a young farmers’ scheme, degressivity and possible transfers of funding from Pillar 1 to Pillar 2. As a consequence, area payments to many of those producing Scottish beef can only be lower in the post-2015 period.
“It is clear from our survey that the scale of any reduction in basic support payments will have a massive influence on future business commitments to producing beef.
“Coupling is an option. This survey highlights that if pitched at an appropriate level and sitting alongside a stable area payment, a coupled payment for producing beef can stimulate production. Devising a Scottish scheme that delivers both would not only be good news for producers but is key for those who currently market, brand, process and sell our beef.
“Scotland is also home to some very large, specialist beef herds where there is considerable investment and resource, including staff, involved in looking after big numbers of cows. Degressivity, or the potential capping of support to these units, will influence their business decisions. This year we have already seen more than 30,000 fewer calves being claimed under the current beef scheme so the loss of even one large scale suckler herd would have significant ramifications for those upstream and downstream, who rely on it for business.”
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Contact Bob Carruth on 0131 472 4006