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Stackyard News Jan 06

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    Costs Hit Cereal Farmers Hard As Production Falls Again

The publication of the official government figures for Scotland's cereal production have highlighted the impact that both production costs and subsidy reform are having on farmers across the country, according to NFU Scotland. The figures confirm that the amount of land in Scotland under cereal production is at a 30-year low, with many farmers looking at different forms of production.

NFUS believes that this is a clear sign that the introduction of the new Single Farm Payment, which provides greater flexibility for farmers to alter production, is having an impact. Cereal farmers have faced significant increases in costs over the last few years, particular on fuel, without a corresponding increase in the prices. This has left many questioning just how much land they commit to producing cereals in future.

NFUS Vice President David Mitchell said:

"There has been no dramatic drop in cereal production this year, but the five per cent drop is a continuation of the reduction in our cereal area. We are now at the lowest level since the early 1970s. There is clear evidence that land previously used for cereals is being put into grass, as some farmers move the emphasis of their business towards livestock production.

"The introduction of the new farm support regime will hasten this decline unless the market responds to the increased costs facing farmers. The new subsidy system provides more options to our members, and it appears they are already taking those up. That must send a clear message to buyers that they must deliver sustainable prices if they want to secure local supply.

"Tellingly, both the area of land under winter crops and spring crops have dropped this year. Normally, a drop in one is compensated by a rise in the other. Many farmers will now be leaving less productive land alone because the income on it does not justify the production costs."

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