SCOTTISH EXECUTIVE

Back

AGENDA 2000 CONSULTATION ON BEEF

At the end of March the Department issued a consultation letter covering the political settlement reached at the Berlin Heads of Government summit on Agenda 2000 – Beef. Annex A provides a summary of the main points of the agreement. The consultation identified the areas where Member States have some discretion in implementing the agreement on beef. Responses to the consultation were passed to the Scottish Executive following the election of the Scottish Parliament. These responses have now been considered and this further consultation indicates how it is proposed that the discretionary elements should be taken forward. Your views are now sought on the following:

1. Use of all the UK national envelope to top-up Suckler Cow Premium

2. Application of across the board reduction of about 4% on Suckler Cow quota with with full or partial re-allocation or exemption for certain categories of producers.

3. The application of two tier extensification for 2000 and 2001 and options for checking eligibility

4. Removal of the 90 head limit for Beef Special Premium Scheme (BSPS).

5. Increase in milk limit for Suckler Cow Premium Scheme (SCPS) to 180,000

6. Other Suckler Cow Quota related issues.

You will find further elaboration on these points in Annex B.

The legal text of the Council Regulation has now been published in the Official Journal (Regulation 1254/1999 of 17 May 1999). Also, a Commission Regulation is necessary to implement the detail of the new beef regime. This was agreed at the Beef Management Committee on 30 July but it may be some time before the formal legal text is published in the Official Journal. However, Annex C provides a summary of the main provisions of the Commission Regulation for your information. You will wish to note in particular the provisions relating to extensification and the new slaughter premium.

I would be happy to discuss the issues with you but if you have relevant comments I should be grateful if these were sent to Ms Ros Harkness at the above address (Room 210) or e-mail rosalind.harkness@scotland.gov.uk to arrive not later than  30 September 1999.  In line with the Government’s policy on openness, the responses will be publicly available unless organisations or individuals clearly indicate when making their responses that they do not wish their views to be made public.

ANNEX A

BEEF – COUNCIL REGULATION 1254/1999

The support level will be reduced by 20% in 3 equal steps, starting on 1 July 2000, from €2,780 /tonne, but a safety-net intervention at €1,560 /tonne will remain. From 1 July 2002 the present intervention system will be replaced by a private storage regime.

Price reductions will be compensated by an increase in existing premia payments to the following rates by 2002:

-Beef Special Premium – Bulls €210 /head once per life;

-Beef Special Premium – Steers €150 /head twice per life;

-Suckler Cow Premium – €200 /head annual; and

-a new Slaughter Premium paid on:

Calves – €50 /head;

Adult Cattle (more than 8 months of age) – €80 /head.

The national ceiling for Beef Special Premium is increased for the UK by 100,000 head until such time as the UK is permitted to export calves under 5 months of age.

Age brackets for the Beef Special Premium for steers and bulls brought forward by one month ie at 9 months and at 22 months for steers.

A ceiling on the availability of Suckler Cow Premium quota has been fixed (as it is for all Member States) at 1,699,511 rights for the UK, and means that from 2000 onwards total quota availability (including any quota held in the national reserve) may not exceed this number. This represents a reduction of some 4 % in UK producers’ quota holdings.

PROVISIONAL RATES FOR BEEF ( €)

ANNEX B

BEEF

Use of the National Envelope

For the UK, the national envelope is worth €21.3 million (£14.01 million) in 2000, €42.5 million (£27.96 million) in 2001 and €63.9 million (£42.02 million) in 2002 and subsequent years. It can be used to do any or all of:

make on-farm headage payments on any or all of steers, bulls, heifers, suckler cows and dairy cows;

top up the slaughter premium on any class or all classes of adult cattle;

make area payments on permanent pasture, used for rearing cattle.

In response to earlier consultations there was overwhelming support in Scotland for using the envelope to top up Suckler Cow Premium payments. While there was also support for using the envelope for area payments on permanent pasture, this is administratively complicated and might result in a loss of resources from the beef sector to the dairy sector in advance of any price-cut in the latter sector.

The Scottish Executive proposes to use the national envelope for making top up payments on suckler cows in accordance with normal scheme rules. This could by 2002 mean an additional top up of around €37.5 a head. View on this proposal are invited.

2. Managing the cut in Suckler Cow Premium quota

The imposition of a ceiling on the availability of Suckler Cow Premium quota is likely to result in having to reduce the amount of quota in producers’ hands by about 4%. The Council regulation requires Member States to set objective criteria including

the rate at which producers have used their individual ceilings during the three reference years prior to the year 2000;

the implementation of an investment or extensification programme in the beef and veal sector;

particular natural circumstances or the application of penalties, resulting in a non-payment or a reduced payment of the premium for at least one reference year;

additional exceptional circumstances having the effect that the payments made for at least one reference year do not correspond to the actual situation as established during the previous year.

The Scottish Executive proposes to make quota cuts at a flat rate with full or partial re-alocation for small producers (eg those holding less than 10 quota units), national reserve recipients in 1998-99, "clawback sufferers" in 1997-99, those participating in extensification programmes recognised by the EU (eg ESAs, Countryside Stewardship), and those producers who could show that they had embarked on an investment programme in the suckler cow sector which would be materially jeopardised by the imposition of the cut. Comments on these proposals are invited.

3. Extensification payments

Member States have a choice of whether to have a single tier Extensification payments system for those with actual stocking rates of less than 1.4 LU/ha or a two-tier system with one rate of premium for those with stocking rates of 2 LU or less and a higher rate for those with stocking rates of less than 1.6 LU. In 2002, these two-tier rates are reduced by 0.2 LU to 1.8 LU and 1.4 LU.

The Scottish Executive proposes to base Extensification payments on the two-tier model (which would maximise the number of Scottish beneficiaries) in the first instance, reviewing the position in 2002 or later if the number of producers with stocking rates of less than 1.4 LU becomes significant. Views are invited on this proposal. Your views are also invited on whether you would prefer us to adopt the at least 5 census days or the all year average (see Annex C). We shall not be able to offer both options to producers .

4. Ninety-head limit on Beef Special Premium claims

Member States have the option to raise, lower or abolish the 90-head limit on claims for Beef Special Premium. Farming interests are divided on this: specialist beef producers generally favour getting rid of the limit; dairy producers finishing small numbers of beef cattle are less convinced, concerned that they could lose out as the ceiling is exceeded and scaleback of premium applied.

The Scottish Executive proposes that the 90-head limit on Beef Special Premium should be removed. This would result in a significant gain to beef producers overall. It would reduce the scope for avoidance activities. Abolishing the limit should not result in a large increase in the number of animals for which premium is claimed (and hence a large overshoot of the regional ceiling). Moreover the upper stocking density limits on claims of 2 LU/ha will further limit increased claims. The Scottish Executive does not see any benefit in making use of the option to exempt small claimants from the effects of the scaleback; small claimants are not necessarily small farmers. Views are invited on these proposals.

5. Limit on dairy producers’ eligibility for Suckler Cow Premium

In general, dairy producers do not qualify for Suckler Cow Premium. Premium at present can be claimed by dairy producers holding no more than 120,000kg of milk quota. The Council agreement allows Member States to lower, raise or waive this limit. If the limit was raised or waived this would increase demand for quota from the national reserve from producers made newly eligible for the premium. This demand could not be met particularly in the first year when the reserve is expected to be minimal. However, given the acute difficulties in the dairy sector the Scottish Executive proposes to raise the limit by 50% from 120,000kg to 180,000kg. Views are invited on this proposal.

6. Other Suckler Cow Premium quota issues

Given that the Beef Regulation agreed by the Agriculture Council re-enacts certain provisions originating in the 1992 round of CAP reform, the Commission’s implementing regulation requires Member States to decide once again on how certain aspects of that reform should be implemented. In particular Member States must decide on:

the siphon to be applied to transfers of Suckler Cow Premium quota without transfer of the holding (between 0% and 15%);

the minimum quota utilisation requirement which producers must meet to avoid quota "clawback" (between 70% and 90%);

the size of the initial national reserve of quota (>0% but <3%) and

the extent to which the quota in "sensitive areas" should be ring-fenced.

The Scottish Executive proposes (1) to retain the maximum rate of 15% for the siphon on quota transfers without transfer of holding; (2) to maintain the current 90% option on the minimum quota utilisation requirement; (3) to retain the ring fences for the HIE area and Scottish LFA and GB lowland with a review in 2001; and (4) to make no specific provision for the National Reserve, with the size of the reserve in 2000 depending on any slack generated by the quota reduction exercise, with reserves in 2000 possibly being as small as one quota unit per ring-fenced area. Views on these proposals are invited.

ANNEX C

AGENDA 2000 – BEEF

COMMISSION REGULATION IMPLEMENTING COUNCIL REGULATION 1254/1999 OF 17 MAY 1999

Agreed at Beef Management Committee on 30 July 1999 but legal text still to be published in the Official Journal.

Summary of Provisions

Beef Special Premium

The retention period remains at 2 months (despite some moves to increase it to 3 months).

Applications can be submitted in the case of bulls not less than 7 months old (at the start of the retention period) and in the case of steers, not less than 7 months and not more than 19 months old in the case of the 1^st age bracket, or at least 20 months old in the case of the 2^nd age bracket. Given the required 2 month retention period this means that the premium for steers is payable at 9 months and at 22 months. (ie one month earlier than at present) Premium on bulls is payable at 9 months

The slaughter model for paying the premium allows the 1^st and 2^nd premium to be combined. This has no immediate effect in the UK where the slaughter model is not at present operated.

Suckler Cow Premium

An annex to the Commission Regulation sets out breeds which are not eligible. There are no changes to these breeds from the previous regulation.

Six month retention period starts the day following that on which the application is submitted.

No additional provisions on reduction of suckler cow quota rights to new ceilings beyond those already in Council Regulation 1254/1999.

Replacements allowed during retention period provided that 20% heifer rule per claim is still respected. Animals replaced during retention period must be notified to SERAD. This is a new requirement.

Minimum age for heifers is 8 months.

The relevant milk quota is now that held on 31 March as opposed to 1 April in the year in which the premium is applied for. The purpose of this change is to ensure that producers who lease in quota have the quota counted against them rather than the person who leases it out.

Member States can waive the minimum numbers rule on quota transfer.

Extensification Premium

Council Regulation 1254/1999 required that account is taken of actual stock of bovine animals including dairy cows not just animals claimed for premia and the amount of milk quota as before. The Commission Regulation presents several options for calculating the actual stocking density:

Producers may make a declaration that they will stay within the prescribed stocking densities (ie below 2.0 or 1.6 in 2000 and 2001) throughout the year (ie every day). This would be subject to control through on-farm inspections.

OR

b. Producers may elect to have their stocking density assessed on an average. This average may be determined by the Member State in 2 ways:

1. through a census on at least 5 days in the year taken at random and not announced until 2 weeks after each date has passed. Producers would then make a return to SERAD for the chosen census dates

OR

2. an average calculated for the whole year (ie 365/366 days). This would require producers to keep and present for inspection detailed movement records on-farm. This would be subject to control through on-farm inspections.

Where Member States have a computerised database, the database may be used to determine the number of LUs on condition that the database offers to the satisfaction of the Member State, adequate assurances as to the accuracy of the data it contains for the purposes of the extensification payment scheme. At present, the GB database does not satisfy this requirement.

There is a new requirement that producers must declare on their IACS form that they wish to participate in the extensification scheme.

NOTE: for sheep, animals counted will continue to be determined by SAP claims not actual sheep numbers.

Slaughter Premium

The on-farm retention period is set at 2 months (ie the same as for Beef Special Premium). This may be checked retrospectively by on-farm inspections or by information held by BCMS.

Animals must be slaughtered within one month of the end of the retention period. (Otherwise the premium is not paid).

Application for premium can be made before slaughter but no premium will be paid until proof of slaughter.

Application for slaughter premium can be made by an agent or other person acting on behalf of the producer. The premium can only be made to the producer who satisfies the retention requirements.

For calves less than 3 months old the retention period is one month.

No premium can be paid on animals slaughtered before 1.1.2000 but the retention period and marketing period can start to count before that date.

The information contained on this WWW site is Crown Copyright but may be reproduced without formal permission or charge for personal or in-house use. Privacy and Content Disclaimer.

For general enquiries about this web site email ceu@scotland.gov.uk or fill out our online questionnaire.

Making It Work Together