Wednesday, March 23, 2005

Size of cash payments to big farmers revealed

The extent of CAP payments made to farmers in the UK in 2002-3 is revealed in data released under new Freedom of Information legislation.

Among the beneficiaries are the Queen who receives over half a million pounds for her estates at Sandringham and Windsor. Prince Charles received nearly £135,000 for his Duchy of Cornwall estate and just over £90,000 for Home Farm, Highgrove.

The largest sum in direct farm payouts went to Farmcare Ltd., a subsidiary of the Co-operative Group, which banked £2,601,767. Lilburn Estates, farmed by Duncan Davidson, founder of builder Perismmon, received £1.3m and multimillionaire Sir Richard Sutton £1.1m. The Vestey Family Trust received just over £906,000.

Leading dukes are all paid six-figure cheques. The Duke of Westminster, reckoned to be the second richest man in Britain, was paid £448,472 through Grovesnor Farms Ltd.
The Duke of Marlborough, who owns Blenheim Palace, received £511,435 through the Blenheim Farm Partnership. The Duke of Richmond, who is said to be worth £45 million, was paid £456,404 through the Goodwood Estate Company. The Duke of Bedford did rather less well with £365,801, while the Marquess of Cholmondeley received only £306,619 and Sir Richard Fitzherbert had to make do with £245,215.

These sums are dwarfed by the amounts received by large companies in the form of export refunds and other payments. Tate and Lyle led this league with over £127m, but NestlĂ© UK got just over £11.6m.

Tuesday, March 08, 2005

EU plans to dump grain surplus on world market

The EU's trading partners are likely to be angered by plans to export a grain surplus that has developed in the last few months on to the world market. Bulging grain intervention stores were thought to be a thing of the past but problems have been caused by a massive harvest in 2004 in the Czech Republic and Hungary. Hungary faces particular problems as a landlocked country and the increased transport costs associated with exporting its grain.

The volume of grain in EU intervention stores has jumped from less than 4mt to more than 10mt since purchasing commenced in November. The Czech Republic and Hungary are facing problems in finding enough storage space for the surplus grain (mainly wheat). Commissioner Fischer Boel has said that the volume of grain has now reached a 'critical mass' and it is planned to open an export tender.

Budget cuts could hit rural development

If the EU budget from 2007 to 2103 is held at one per cent of economic output as some member states insist, it could be the rural development budget that takes the hit. Market support is seen as too politically sensitive to tamper with.

This also applies to the ongoing argument about whether cash for direct aid payments in Romania and Bulgaria should be included under the budgetary ceilings agreed for EU farm payments up to 2013. The option of squeezing the two new members within existing guidelines has been raised as a way of saving several billion euros.

However that would probably mean a reduction of eight to nine per cent in direct aids which would be politically unacceptable to countries such as France. The switch towards a Common Agricultural and Rural Policy, in the spirit of 'multi-functionality', could be placed in jeopardy.

Most of sugar mountain was for making jam

Estonia has claimed that the greater part of a massive sugar mountain in the country is the result of Estonians hoarding enormous amounts of sugar to indulge in the favourite national pastime of jam making.

However, the matter is far from funny as the small Baltic country faces up to €50m in fines (2% of GDP) for failing to get rid of as much as 90000t of surplus sugar prior to accession. Accession rules state that new member states have to bear the cost of getting rid of stocks of any product 'exceeding the quantity which could be regarded as constituting a normal carryover.' Estonia is charged with having failed to prevent traders flooding the low price Estonian market in anticipation of much higher EU prices after enlargement.

The problem in Estonia is seen as a test case on which to base discussions with other new member states. Cyprus and Malta are in the firing line for having high sugar surpluses.