Supplementary
memorandum
submitted
by
the
Co-operative
Group
(A
52(a))
I
list
below
the
subsidised
commodity
sectors
where
Farmcare
has
an
existing
interest,
with
indications
of
our
current
volume
of
production:
| Arable
Products |
|
| Wheat |
96,000
tonnes |
| Barley |
29,000
tonnes |
| Rape |
11,500
tonnes |
| Dried
Peas
and
Beans |
c
7,000
tonnes
|
Dairy
Farmcare
currently
has
a
milk
quota
of
just
over
30
million
litres,
milking
3,500
cows
across
12
herds
in
England
and
Scotland.
IACs
Farmcare
received
IACs
payments
of
£2.5
million
for
the
last
year,
including
set-aside
payments
of
£500,000.
Projections
for
the
Future
Farmcare's
commercial
goal
is
to
manage
a
farming
business
that
achieves
acceptable
levels
of
profitability
without
production
subisidies.
We
believe
that
this
goal
is
realisable
over
the
long
term
but
requires
recognition
that
subsidies
to
our
global
competitors
must
also
be
withdrawn.
However
the
delivery
of
profitable
farming
in
the
UK
without
subsidies
will
require
substantial
changes
to
what
and
how
we
farm.
Farmcare,
for
instance,
is
unlikely
to
continue
to
produce
dried
peas
and
beans
for
the
commodity
sector.
Farmcare
is
also
currently
re-evaluating
its
dairy
interests
and
while
we
expect
to
continue
to
have
an
interest
in
the
dairy
sector,
the
downward
pressure
on
farmgate
prices
(caused
in
part
by
lowering
export
refunds)
will
force
us
to
reduce
our
herd.
At
its
current
price,
wheat
is
at
barely
acceptable
levels
of
profitability
for
Farmcare.
If
subsidy
was
to
be
withdrawn
now,
we
could
not
produce
wheat
at
a
profit
on
the
current
field
system.
However,
we
are
moving
towards
large
scale,
block
cropping—bearing
in
mind
certain
environmental
considerations—over
the
next
two
years
as
the
only
way
in
which
we
could
secure
a
profitable
future
for
Farmcare
in
wheat
production
without
subsidy.
Farmcare's
view
is
that
although
production
subsidies
cushion
farmers'
incomes
in
the
short
term,
their
global
impact
stimulates
over-production
and
distorts
the
market
which,
in
turn,
depresses
the
world
price
of
these
crops.
However,
the
unilateral
withdrawal
of
subsidies
to
the
UK
farmer
would
disadvantage
us
against
our
global
competitors
many
of
which
farm
in
a
highly
subsidised
environment,
either
overtly
or
covertly.
The
profitablity
of
UK
farming
is
also
inextricably
linked
to
the
competitiveness
with
which
farmers
market
their
produce.
The
Curry
Commission
contains
some
important
recommendations
in
this
respect
and
Farmcare
is
actively
seeking
to
reconnect
with
the
market
and
its
customer
(in
its
many
guises)
by
meeting
product
specifications
and
developing
customer
supply
contracts
which
are
long
term
and
based
on
agreed
price
formulas.
Wider
and
deeper
agricultural
co-operation
will
be
an
important
mechanism
in
delivering
renewed
sustainability.
8
April
2002
|
