THE NEW EU Agriculture Commissioner, Dacian Ciolos, has launched a public debate on the future of the Common Agricultural Policy (CAP). This is expected to lead to the Commission issuing a paper on the format of the CAP (post-2013) towards the end of the year.
As a consequence, lobbying from National Governments and industry groups has gathered apace. The enlarged agricultural land area of the European Union since the accession of the New Member States has not been matched by a similar increase in the CAP budget, so tension between the desires of the new and the original 15 Member States is likely to lead to extensive negotiations.
The UK represents the most significant destination for the majority of the Isle of Man’s dairy, beef and sheep production so UK markets have a significant effect on the Isle of Man’s farming economy.
The ongoing weakness of the pound against the euro continues to make British exports attractive. Beef prices are marginally lower than during the same period last year whilst lamb prices are significantly ahead. The General Election in the UK is unlikely to have any dramatic effect on agricultural policy, although the likely UK spending review may adversely affect overall funding for agriculture.
With the first full year of decoupled agricultural support completed, the industry continues to adjust to the new structures and opportunities which have arisen. Isle of Man Meats has started a major review of its operation in order to ensure that it is in the best position to face the challenges ahead.
The reduction of Government slaughter premiums, leading ultimately to their removal in October 2011, means that Isle of Man Meats will face increased competition from exporters for livestock supplies. A significant drop in calf registrations in 2009 has raised concerns in some quarters.
However, this comes after a period of significant growth and care is needed not to take the figures out of context. Reductions will be the result of a number of reasons, for example: farmers pausing to taking a fresh look at their businesses and considering their next steps; ensuring their stocking levels are sustainable having grown their herds rapidly over recent years; and a strong market for breeding cattle in the UK drawing animals off Island.
Government continues to seek some form of transitional extension to the EU Red Meat Derogation. The derogation allows the Department to limit imports of beef and lamb and thereby protect the local market. Meetings with DEFRA and European Commission officials indicate that some sort of interim extension might be possible if agreement can be reached at a political level for the current derogation to be reviewed.
Government is also working with the dairy industry, to implement the recommendations of the Promar report. The major production concern is creating a level milk supply to the Creamery that is maintained around 25m litres per annum. Volumes below this figure would affect the Creamery’s production efficiency significantly.
