Agricultural Bulletin A Briefing For Farmers And Land Agents.We look at how UK farmers areresponding to theplague of diseases affecting their livestock and the changing fortunes of the dairy industry. We also examine the EU Commission's proposed capping system. DOUBLE DISEASE BLOW FOR UK FARMERS Foot-And-Mouth And Bluetongue bluetongue an infectious, non-contagious disease of sheep and occasionally cattle, transmitted by Culicoides spp. Caused by an Orbivirus with at least 24 serotypes worldwide. Cattle are the reservoir and amplification hosts. The outbreak of FMD FMD foot-and-mouth disease. and bluetongue has had severe implications for UK livestock farmers. Defra responded quickly to the spate of FMD cases, but the longterm outlook for bluetongue is dismal. UK livestock farmers were badly hit by two serious diseases this autumn. At the start of August, foot-and-mouth disease foot-and-mouth disease, highly contagious disease almost exclusive to cattle, sheep, swine, goats, and other cloven-hoofed animals. It is caused by a virus that was identified in 1897. (FMD) broke out in Surrey*. Fortunately, FMD is relatively easy to control if action is swift and decisive. The outbreak was restricted to a single county and markets are returning to normal. However, the second livestock disease to materialise this autumn - bluetongue - may have long-term consequences. FMD tramples Surrey At the first sign of FMD in August the Department for Environment, Food and Rural Affairs The Department for Environment, Food and Rural Affairs (Defra) is the United Kingdom government department responsible for environmental protection, food production and standards, agriculture, fisheries and rural communities in England. (Defra) acted promptly and applied the usual restrictions. The situation was brought under control quickly and most of the restrictions were lifted within a month. In mid-September, a further case of FMD was confirmed, followed by a number of other cases, all clustered in Surrey. The size of the outbreak and number of animals slaughtered was tiny compared to the 2001 FMD epidemic. Nevertheless, it has had a disproportionate effect on the UK livestock industry and caused a great deal of financial hardship. The timing couldn't have been worse. Lamb prices collapsed as the ban on exports resulted in a glut glut pronounced as rut, slut Vox populi An excess of a service or skilled labor in a particular area. See Physician glut. of lambs (particularly light lambs). Furthermore, not only is autumn the period when animals are moved down from the hills to winter pastures, it is also the peak store sales season; movement restrictions A restriction temporarily placed on traffic into and/or out of areas to permit clearance of or prevention of congestion. disrupted these activities. Fortunately, the UK agricultural departments have responded to the financial problem. Defra has announced a package worth a reported [pounds sterling]12.5m (the main component consists of extra Hill Farm Allowance payments). Meanwhile, the Scottish Government The Scottish Government (SG) (Scottish Gaelic: Riaghaltas na h-Alba) is the executive arm of government of Scotland. It was established in 1999 as the Scottish Executive has introduced a welfare scheme to cull cull the act of culling. Called also cast. lambs for which there is no market. It appears that the source of infection in August was a leaking pipe at the Pirbright facility. Coupled with heavy rain and building work, the virus was able to escape. However, it is not clear which of the two organisations at Pirbright - Merial or the Institute of Animal Health - was ultimately responsible for the failure of bio-security. Bluetongue blows in On 22 September, a Highland cow near Ipswich, Suffolk, was found to have the bluetongue virus. This was the first reported case in the UK. Defra hoped that it would be an isolated incident. Instead, it had to announce that the disease had established itself in the area. Blame the midges midges see ceratopogonidae and culicoides. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Defra, a species of biting midges biting midge n. See punkie. Noun 1. biting midge - minute two-winged insect that sucks the blood of mammals and birds and other insects no-see-um, punkey, punkie, punky , blown across from the continent, carried the virus to Britain. It is now circulating between the local midge midge, name for any of numerous minute, fragile flies in several families. The family Chironomidae consists of about 2,000 species, most of which are widely distributed. The herbivorous larvae are found in all freshwaters; the larvae of some species live in saltwater. population and ruminants. Bluetongue is a non-contagious disease. It is common in sheep in southern Europe Southern Europe or sometimes Mediterranean Europe is a region of the European continent. There is no clear definition of the term which can vary depending on whether geographic, cultural, linguistic or historical factors are taken into account. , but flocks affected in northern Europe have had mortality rates of around 40%. Even where animals do not die, the disease reduces productivity. Thus, the economic effect is potentially disastrous for the UK, which has Europe's largest sheep flock. Dealing with the problem With the bluetongue outbreak confirmed, exports of live animals have been banned and the movement of animals Movement of Animals (or On the Motion of Animals or De Motu Animalium) is a text by Aristotle on the general principles of motion in animals. External links
removal of inferior animals from a group of breeding stock. The removal is premature, i.e. before completion of its life span, disposal of an animal from a herd or other group. of infected in·fect tr.v. in·fect·ed, in·fect·ing, in·fects 1. To contaminate with a pathogenic microorganism or agent. 2. To communicate a pathogen or disease to. 3. To invade and produce infection in. stock will not halt the spread of the disease in the same way that it does for FMD, because the virus is not spread from animal to animal. Thus, short-term prevention efforts focus on the carrier population, midges - which is obviously difficult. A vaccine is likely to be the only way of controlling the disease in the long term. Efforts are well underway to produce an effective vaccine for the strain of the disease circulating in the UK. But this is not expected to be available until next year at the earliest. The best time to undertake a vaccination vaccination, means of producing immunity against pathogens, such as viruses and bacteria, by the introduction of live, killed, or altered antigens that stimulate the body to produce antibodies against more dangerous forms. programme is in the spring, before the virus-carrying midge population becomes too active (it peaks during late summer and in the autumn). There are concerns over whether a vaccine will be ready to this timescale timescale Noun the period of time within which events occur or are due to occur timescale n → délais mpl timescale time (Brit) n , and if there will be enough to immunise every animal in northern Europe. The impact on farmers The bluetongue outbreak has dealt UK livestock farmers a bitter blow. Any farm that has been infected will face the prospect of losing stock to the disease. However, with no automatic culling (and thus compensation), the financial consequences may be worse than for those affected by FMD. Most farm insurance policies will not cover such losses. Farmers whose animals have not caught the disease will still be affected. Only a limited number of abattoirs are processing finished cattle and sheep within the protection zone; no livestock markets are operating. Restricted movements outside the zone mean that finishers-off are unable to access the abattoirs they usually supply. Furthermore, the uncertainty surrounding the outbreak will no doubt have an effect on future store cattle prices and breeding sheep values throughout England and Wales England and Wales are both constituent countries of the United Kingdom, that together share a single legal system: English law. Legislatively, England and Wales are treated as a single unit (see State (law)) for the conflict of laws. . Any breeding stock producers within the protection zone will not be able to market their stock in the rest of the UK. The best hope to wipe out the disease is a long hard winter. But this is the last thing many farmers want considering the quantity and quality of forage forage Vegetable food, including corn and hay, of wild or domestic animals. Harvested, processed, and stored forage is called silage. Forage should be harvested in early maturity to avoid a decrease in protein and fibre content as crops mature. and bedding available, and the cost of buying feed. However, recent winters have not been severe enough to stop the disease in continental Europe Continental Europe, also referred to as mainland Europe or simply the Continent, is the continent of Europe, explicitly excluding European islands and, at times, peninsulas. and there is a chance that this disease is here to stay - in the short term at least. > THE UK DAIRY INDUSTRY Factors Likely To Affect Farmers' Fortunes The recent increase in milk prices and the 0% set-aside come as good news for farmers. But the prospect of increased legislation and the phasing out of quotas suggests that they need to focus on controlling internal factors to ensure sustainability. In the August edition of Agricultural Bulletin, we reported on the dairy industry's sudden change in fortune. UK milk prices rose by more than anyone was expecting. Strong demand, coupled with reduced output and low stocks, drove prices upwards. However, producers have yet to benefit as the booming commodity and spot prices have been slow to translate into improved farm gate returns. This is mainly because many milk buyers are locked into long-term supply contracts. With a large proportion of the UK milk supply effectively committed, the spot market is quite 'thin' and processors looking to secure supplies could create a price surge. Favourable forecast for farm gate prices Of major importance to most producers is: what will happen when existing contracts expire? There are encouraging signs that both processors and retailers are acknowledging the market realities and looking at solid price increases. It is thus feasible that, by the new year, the average farm gate price will be 25 pence per litre LITRE. A French measure of capacity. It is of the size of a decimetre, or one-tenth part of a cubic metre. It is equal to 61.028 cubic inches. Vide Measure. (ppl) and, on a rolling 12-month basis, the price for the 2007/2008 milk year will be 21.5ppl. Looking forward to 2008/2009, even though spot prices may fall from recent headline levels, maintaining a rolling average price of around 25ppl seems possible. Health Check The forthcoming Common Agricultural Policy Agricultural policy describes a set of laws relating to domestic agriculture and imports of foreign agricultural products. Governments usually implement agricultural policies with the goal of achieving a specific outcome in the domestic agricultural product markets. (CAP) Health Check may signal further cuts in European Union European Union (EU), name given since the ratification (Nov., 1993) of the Treaty of European Union, or Maastricht Treaty, to the European Community (EU) support prices for milk products. But we hope this will be academic as actual market prices remain strong. The review will almost certainly confirm the end of milk quotas in 2015. Over the past years, UK producers have had a taste of things to come as quota values have fallen to inconsequential in·con·se·quen·tial adj. 1. Lacking importance. 2. Not following from premises or evidence; illogical. n. A triviality. levels. But many other EU nations still have strong quota markets. It seems unlikely that cross-border trading will play a part in the phasing out of production controls. Instead, the EU Commission appears to favour increasing quota volumes across Europe gradually so that they eventually become irrelevant. The lowering of the set-aside rate to 0% for 2008 will benefit dairy farmers Dairy Farmers is one of Australia's largest and oldest dairy manufacturers, established in 1900, supplying products to local and international markets such as eastern Europe, the Middle East and Asia. . Many farmers have been lumbered with set-aside since 2005 and will be glad to return to full cropping. Hopefully the 2009 Health Check will remove it permanently. Increased costs and legislation Unfortunately, there has been a surge in the cost of feed prices for the coming winter. Arable farmers may be enjoying better prices for cereals, but this sharp spike in prices is feeding through to all livestock rations. A sizeable part of the forthcoming milk price increases will disappear in higher costs. Another cloud on the horizon is the likelihood of more environmental legislation. The Government is currently consulting on a proposal to increase the area designated as a Nitrate Vulnerable Zone A Nitrate Vulnerable Zone is a conservation designation of the Environment Agency for areas of land that drain into nitrate polluted waters, or waters which could become polluted by nitrates. (NVZ NVZ Nitrate Vulnerable Zone NVZ Nederlandse Vereniging Van Zeepfabrikanten (Dutch union of soap producers) ) and to tighten the NVZ rules. If these proposals are implemented, industry players will require additional capital investment in storage and treatment facilities. They will also incur greater ongoing compliance costs. On top of this, the Government may introduce further measures to comply with the Water Framework Directive The Water Framework Directive (WFD), or more formally "Directive 2000/60/EC of the European Parliament and of the Council of 23 October 2000 establishing a framework for Community action in the field of water policy" is a European Union directive which commits member states to (this aims to improve general water quality). Dairy farmers also need to recognise that their Single Payment for 2006 is likely to be the largest they ever receive. The move to a regional average in England and deductions throughout the EU will result in a drop in payment between now and 2012 for almost all but the most extensive producers. It is not inconceivable that by 2020, area payments under the Single Payment Scheme (SPS (Standby Power System) A UPS system that switches to battery backup upon detection of power failure. See UPS. SPS - Symbolic Programming System. Assembly language for IBM 1620. ) could be down to [pounds sterling]60-80 per hectare hectare (hĕk`târ, –tär), abbr. ha, unit of area in the metric system, equal to 10,000 sq m, or about 2.47 acres. ([pounds sterling]24-32 per acre). Fine tune your operations With volatile markets, reduced support and increased legislation expected in the future, farmers need to focus on controlling internal factors. The prices for many inputs have risen strongly recently and farmers need to maximise output. This calls for the best technical efficiency. If farmers concentrate on improving cost control and technical performance, they stand to reap the benefits of booming industry prices and be immune to negative forces. FARMLAND PRICES 22.6% Increase UK farmland prices rose to new levels this year as demand for commercial and residential land soared. UK farmland prices have reached record levels, according to the Royal Institution of Chartered Surveyors | The Royal Institution of Chartered Surveyors (RICS) is an independent, representative professional body which regulates property professionals and surveyors in the United Kingdom and other sovereign nations. (RICS RICS Royal Institution of Chartered Surveyors RICS Royal Institute for Chartered Surveyors RICS Right Intercostal Space (medicine) RICS Return Inventory and Classification System RICS Range Instrumentation Control System ). The RICS rural land market survey, published in September, reported that the average price of farmland increased by 22.6% on a year earlier in the first half of 2007. This compares to an average price increase of 18.1% for the same period in 2006. The average price of farmland is now [pounds sterling]8,850 per hectare ([pounds sterling]3,662 per acre). Arable land In geography, arable land (from Latin arare, to plough) is an agricultural term, meaning land that can be used for growing crops. Of the earth's 148,000,000 km² (57 million square miles) of land, approximately 31,000,000 km² (12 million square miles) are has risen to [pounds sterling]9,287 per hectare ([pounds sterling]3,758 per acre) from [pounds sterling]8,451 per hectare in the second half of 2006, while pasture land has risen to [pounds sterling]8,412 per hectare ([pounds sterling]3,404 per acre) from [pounds sterling]7,878 per hectare ([pounds sterling]3,188 per acre) for the same period. The report reveals that demand for land is booming in both the agricultural and non-agricultural sectors, with the large City bonuses paid to 'lifestyle buyers' fuelling the demand for residential farmland. The increase in commodity prices means commercial farmers are keen to expand. Sales to individual farmers rose to 50%, the highest increase since the survey began. There is also interest from European farmers as UK farmland is still favourably priced, particularly compared to Denmark and Ireland. Fig 1: Farmland prices ([pounds sterling] per ha) > NEW CAPPING FORMULA FOR SINGLE PAYMENTS <Health Check The EU Commission has proposed a percentage-based capping system for income aid. This will hit larger farmers the hardest - potentially reducing their aid by up to 45%. The EU Commission's first formal Health Check proposal was tabled at the end of November. Leaks to the press and information gleaned from the commissioner's speeches prior to publication meant there were no surprises. But one concept was watched carefully. It emerged recently that the commission has developed a new formula for the old idea of capping individual Single Payments. Rather than the absolute cap at [euro]300,000, which was rejected previously, it has suggested a three-tier system A Three-tier system is any system that has three distinct levels.
The proposed method will reduce, on a percentage basis, the amount of income aid farmers receive under the CAP (figure 2). For example, a farmer with a net [euro]500,000 Single Payment would receive [euro]375,000 - a reduction of [pounds sterling]85,000 ([euro]1=[pounds sterling]0.68) for a UK farmer. The figures quoted are examples only and could change before the Health Check is agreed. The commission hopes that this formula will be more acceptable to those member states that have been particularly opposed to the absolute cap, i.e. the UK and Germany. To further coerce the opposed governments, there has been talk that the reduced Single Payment funds will be available for use in the member state applying the cap. These funds could be used to support rural development programmes, i.e. for marketing initiatives or payments to disadvantaged areas. Based on the Health Check's timetable, legislative proposals won't be made before May 2008; it's unlikely the agreed capping will take effect before 2010. Fig 2: Examples of Single Payment reduction > ALIGNING FARMERS WITH THE MARKET Key Messages From English Farming And Food Partnership's Fourth Annual Conference According to EFFP EFFP English Farming and Food Partnerships (UK) , farmers and food companies need to develop a market focus and work together to take advantage of the new consumerdriven dynamic that is emerging. Farmers and food companies in the 21st century must compete in a market shaped by global and local drivers. Take, for instance, wheat, where low stocks, bad weather, increased demand for feed, biofuels and growth in emerging economies have created a supply and demand imbalance, resulting in soaring world prices. In addition, they must also contend with a new industry dynamic, one where government no longer link subsidy to production but is driven by consumers instead. These two together present a new trading environment, one which presents significant challenges but also considerable opportunities for those who are market-focused. Consumer driven Today's consumers are increasingly knowledgeable and demanding in their food purchasing behaviour. Organic, healthy, free range, premium, fair trade, ethnic and low-carbon food are all niche markets A niche market also known as a target market is a focused, targetable portion (subset) of a market sector. By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. that are closely linked to their source of farm production and are growing quickly. If trends in household food expenditure and food service continue on the same trajectory, this would represent a [pounds sterling]160-70bn industry by 2020 and one which is likely to be made up of a number of these differentiated segments. This offers farmers a unique opportunity to align themselves with the market, identifying and targeting specific consumer segments and then offering differentiated, value-added products. A collaborative approach How can farmers and food companies respond to this new market dynamic? Through collaboration, both vertically and horizontally throughout the food chain. Collaboration can mitigate the increasing impact of supply imbalances and volatility from global markets and create a business model that is more robust and sustainable. In collaborating, farmers and food companies can also match the quality and quantity of supply to the emerging market opportunities and take advantage of the potential this new dynamic presents. Significant progress has been made so far, the English FCB See DOS FCB. (operating system) FCB - file control block. sector is thriving and there has been an important cultural shift in working ever closer throughout the food supply chain, but there is scope to achieve far more. This challenge depends on developing innovative business models, such as the FCB model, and entrepreneurial modes of working that encourage and reward trust and commitment and provide mutual benefit to all. > SINGLE PAYMENT SCHEME An Update Favourable Single Payment conversion rate The (relative) weakness of the pound towards the end of September has resulted in a higher Single Payment conversion rate. The 2007 Single Payment conversion rate has been set at [euro]1 = [pounds sterling]0.6968. This is 2.8% higher than the [euro]1 = [pounds sterling]0.6777 used in 2006. This rate will be used to convert all payments under the 2007 SPS from euros into sterling, and includes the energy and protein crop supplements. On a [euro]50,000 claim the difference between the 2007 and 2006 rates equates to an increase of [pounds sterling]955. > Ten-month rule to be simplified Currently, under the ten-month rule, farmers have to keep SPS-declared land parcels at their disposal for ten months. This rule has been one of the pitfalls that many farmers have experienced when exchanging land, particularly those renting land for potatoes and vegetables on a shortterm basis. The EU Commission is now proposing that a claimant CLAIMANT. In the courts of admiralty, when the suit is in rem, the cause is entitled in the Dame of the libellant against the thing libelled, as A B v. Ten cases of calico and it preserves that title through the whole progress of the suit. only has to hold the land on a single day in the claim year (member states may be able to choose their own date - the UK will probably use 15 May) for the claimant to take cross-compliance responsibility for the whole calendar year. This stands even if the land is not legally in his/her occupation for the whole year. The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Ms Susan Shaw Susan Shaw was born in 1929 as Patsy Sloots and died in 1978. She was prepared by the J Arthur Rank Organization to be one of their starlets in the so-clled "Charm School". After a good start to her career, it slowly disintegrated due to excessive alcohol. Smith & Williamson 25 Moorgate London EC2R 6AY UNITED KINGDOM Tel: 207131 4000 Fax: 207131 4029 E-mail: info@smith.williamson.co.uk URL URL in full Uniform Resource Locator Address of a resource on the Internet. The resource can be any type of file stored on a server, such as a Web page, a text file, a graphics file, or an application program. : www.smith.williamson.co.uk Click Here for related articles (c) Mondaq Ltd, 2007 - Tel. +44 (0)20 8544 8300 - http://www.mondaq.com |
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