The proposed Older Cattle Disposal Scheme (OCDS) for pre-August 1996 born animals, which is expected to replace the soon to be terminated OTMS, has many more good points than bad, the National Beef Association said today.
Its three year term, which the European Commission only agreed to after sustained pressure from the UK industry and government, will be pivotal in protecting suckler herd structures over the immediate post-OTMS adjustment period.
Also because it is a voluntary scheme with no kill-by date, breeders with pre-August 1996 cows do not have to surrender them if they do not want to - and after the scheme is over in 2008 the only additional cost facing them will be a fallen stock collection fee when the animal, which cannot enter the food chain, is taken away and destroyed.
"Each of these moves is extremely helpful. Defra estimates that there will be some 716,000 older cows on the ground at the end of autumn so anything less than a three year disposal period would have put enormous pressure on the breeding heifer market as well as risk provoking an avoidable, and unwanted, drop in suckler beef production," explained NBA chief executive, Robert Forster.
"The European Commission had initially proposed a one year scheme and after it accepted UK arguments for three years it wanted an annual drop in compensation payments of 25 per cent."
"Fortunately it was persuaded by UK Ministers and officials to reduce this and a ten per cent annual tapering of compensation over the three years is a much better compromise result."
Compensation itself will be 360 euros (£244.80) over the first year and will be paid on a per head basis not pence per kilo.
"The Commission is adamant that it must work within a fixed budget so the price of a three year scheme is a payment system in which each cow has the same value and administration expenses are minimised," said Mr Forster.
"The OCDS is not expected to be adopted until mid-December so as long as there are no delays to the OTM Rule change the first post-August 1996 cows could move back onto the market six weeks earlier."
"This means that the poorer quality animals should still be able to move through the OTMS where they are likely to earn more than they would on the market - which will assist trade for commercial quality animals over the cautious, pre-export, introductory period."