Arable group to cap spending and increase levy
VIC ROBERTSON AND FORDYCE MAXWELL THE economic woes of arable farming have forced the industry’s marketing, research and development body, the Home Grown Cereals Authority, to ditch plans for increased spending - and plans for a levy increase.
At its board meeting yesterday, the authority accepted the need to cap spending at its current level and scrap a proposed 3p per tonne increase in growers’ levy which would have taken cereals to 43p and oilseeds to 68p.
The decision came after extensive consultation throughout the industry and outright rejection of any funding increase by farmers’ unions on both sides of the Border.
It is expected that research and development projects will be the major casualty with an anticipated budget cut of about £1 million, 16 per cent, in the coming year. Total projected spend for 2003-04 was £11.2 million.
The HGCA said that recommendations for a levy increase - the first since 1996 - stem from the disastrous harvest of 2001 which had resulted in a 25 per cent cut in levy income and a serious dip into reserves.
The board will now have to draw up new budget proposals for the coming financial year, which starts at the beginning of July.
"The expected cut backs will mean no new research and development projects in cereals for the next 12 months," said HGCA chairman Tony Pike. "This is regrettable, but was explained to all stake holders during the consultation period.
"If we are to satisfying consistently the industry’s needs, then a regular income stream is required because substantial variations in income would make it very difficult for us to support long-term research and development projects."
A spokesman for NFU Scotland, confirming the union’s "No" to an increase announced earlier this week said that a reduction in HGCA activity was an unfortunate legacy of depressed combineable crop incomes for the past five years.
A cargo of 6,000 tonnes of groats - oats with the husks removed - will leave Dundee this week for Venezuela where the product will be rolled into porridge oats or manufactured into cereal bars.
The final shipment in a 20,000 tonne contract signals, according to Ian Harper, logistics manager with Quaker Oats in Cupar, a major opportunity for Scottish cereal growers.
He said: "This is business we have been trying to get for years. There is a potential market for Scottish oats in Latin America of at least 40,000 tonnes each year. Currently most of the oats for this market are from the US and Canada, but we can compete on both cost and quality."
The Quaker plant in Cupar handles 80,000 tonnes of oats each year and throughput has been growing recently at 20 per cent year on year. The Scottish harvest usually yields about 100,000 tonnes of oats but Harper is keen to see an increase to end "imports" from England to meet orders.