LSIRD NAPLIO CONFERENCE ABSTRACTS

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Beef farming in the GB LFA -

farmer response to the 1992 CAP reform measures and implications for meeting world trade obligations.

Michael Winter & Alastair Rutherford

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The research on which this paper is based forms part of a larger three year project to investigate the impact of the 1992 reforms of the Common Agricultural Policy (CAP) on the GB countryside. The research involved a continuous desk study and interviews with 558 farmers and 17 crofters. Two thirds (389) of the interview survey possessed a beef enterprise and 125 of these were located in the LFAs.

The main objective of this paper is to identify how farmers have responded to the policy measures introduced in the beef sector in the 1992 reforms, in particular the introduction of stocking density limits on premia payments and the extensification premia. The first section of the paper outlines the main features of the beef measures with some additional relevant details on the sheep regime as the two are so interlinked. The second section of the paper turns to a detailed examination of the impact of these measures on farm management in the GB LFAs, showing that in the majority of cases the payment of extensification premia has not led to real extensification on the ground, either in beef or sheep systems. Over-grazing continues to be a problem in the uplands, although this is largely due to continuing high sheep numbers. In many instances the reduction of sheep numbers and a slight increase in cattle numbers would be environmentally beneficial. Any chance that this may happen under the 1992 regime has been seriously challenged by the impact of the BSE crisis. The third section of the paper turns to a consideration of the BSE crisis.

The BSE crisis is of concern to the GB countryside agencies because of the important role of beef farming in maintaining landscapes and habitats in the British countryside. The collapse of cattle prices in 1996 raised concerns over the future viability of beef production on many British livestock farms, particularly more marginal, but environmentally important LFA enterprises.

The existence of the GATT Uruguay Round Agreement on Agriculture and the deliberations of the World Trade Organisation, imposes constraints on the options open to EU policy makers. In the beef sector the compatibility of the reformed CAP and GATT obligations have for some time been questioned, with the distinct possibility of a longer term structural crisis without further reform. The fall in internal consumption following the BSE crisis and the widespread use of intervention storage to support the sector greatly exacerbates the potential for a future GATT/CAP crisis.

In conclusion: Beef production in the GB uplands is important in both a social and an environmental context. Due to long term trends in the supply and demand balance, the major effects of the BSE crisis on the European beef market, there is enormous pressure for further significant reform of the EU beef regime. Our research suggests that the producers most at risk from the economic effects of the beef crisis are those whose systems of production are the most environmentally beneficial. It is also suggested that a policy response that relies on an entrenchment of mechanisms adopted in the 1992 reforms are unlikely to be successful in encouraging a beef sector that enhances the quality and diversity of the countryside as a natural and cultural resource. Further reform of the beef sector needs to integrate these wider and longer term objectives.

Countryside and Community Research Unit
Cheltenham and Gloucester College of Higher Education,
Cheltenham Glos. GL50 4Z. UK

Alastair Rutherford

The Countryside Commission
John Dower House,
Cheltenham, Glos. GL50 3RA. UK