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    Beef Production Subsidy Myth Exposed
29/03/05

The national press could not have got its agricultural subsidy disclosure stories more wrong, the National Beef Association said today.

Journalists and broadcasters have taken information released under the Freedom of Information Act to once again accuse farmers of featherbedding themselves on tax payers' money.

However the truth is that for decades coupled support payments have been employed to underwrite the cost of ex-farm products to processors, retailers and consumers.

And now that subsidy de-coupling has been introduced the temporary Single Farm Payment (SFP) will be used by farmers to prepare themselves, and their customers, for 2013 when it will be withdrawn and all farm income is earned directly from the market.

"This will hit consumers just as hard as it will farmers because both will have to make big adjustments that will underline the fallacy that farmers have been routinely pocketing large sums of money at the tax payers' expense," explained NBA chief executive, Robert Forster.

"At present beef farmers are still selling specially bred cattle onto the food market for 30-35 per cent less than the cost of production which works out at around £330 for average weight animals."

"Up until January 1st this chasm between outgoings and market income was filled through headage based subsidies."

"However it has never been acknowledged that these benefited the consumer as much, if not more, than the farmer because subsidies not only made it possible for beef to continue to come forward even though it was being produced at a significant loss but also meant that consumers, as well as retailers and processors, were able to pay much less for it as it moved through the supply chain."

"This comfortable situation has changed dramatically. The new farm support system has a time limit so farmers must use their SFP to reduce production costs and make their businesses more efficient so they can survive without any EU payments in eight years time."

"Consumers however will have to pay more their beef unless they want to rely on cheap imports from countries with much lower production and food safety standards than our own that will be difficult to organise on a regular basis - or be delivered at the volume required."

"This knocks on the head the knee jerk notion that consumers are subsidy victims and farmers have been fat cat beneficiaries."

"While in the past below cost beef production was underwritten by consumers through taxes they will now have to pay 25-30 percent more for UK beef through the market if top quality domestic production is to be maintained."

"For their part beef farmers, who have never grown sleek at the taxpayers' expense because they consistently turned out cattle at less than cost, will have to find ways of taking 20-25 per cent of the expense out of their businesses or else they will not be able to survive."

"Unfortunately it is unlikely that the national press will take any notice of these observations because it would not wish the reality of the farm subsidy situation to interfere with longstanding, farmer bashing, urban myth they are so determined to promote," Mr Forster added.

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