HL Deb 20 October 1993 vol 549 cc52-3WA
Baroness Jeger

asked Her Majesty's Government:

What is the average EC subsidy paid per hectare to cereal farmers and to tobacco farmers and what rules as to production and quality apply to each.

Earl Howe

Arable area payments for cereals are paid per hectare of cereals grown. They will be calculated on a notional rate of 45 European Currency Units (ECU) per tonne from the 1995/96 marketing year (25 ECU/tonne in 1993/94, 35 ECU/tonne in 1994/95), converted into regional payments per hectare on the basis of historic regional yields. Average national yields for cereals range from some 2.5 tonnes/hectare to nearly 7 tonnes/hectare and regional payments per hectare therefore differ significantly. To qualify for these payments the cereals must be sown and grown accordingly to locally recognised standards and maintained at least to the start of flowering.

Cereals producers also benefit from a guaranteed price system supported by intervention buying and subsidised exports. Minimum quality standards apply to cereals offered for intervention. These standards are set out in Commission Regulation (EEC) No. 689/92. Standards of cereals traded on the open market are a contractual matter between buyer and seller.

Estimates of subsidy on a per hectare basis for tobacco harvests are not directly comparable with those for cereals and other crops under the arable payments schemes since payments relating to a particular tobacco harvest may be spread over several budgetary years and they are paid on a tonnage not an area basis.

The EC tobacco regime has recently been subject to significant reform. From this year's harvest a new system of quotas will operate to control production. Intervention purchasing and export refunds will no longer be available as normal features of the regime and support will be provided by means of premia payments made to growers for tobacco processed under contract. For the 1993 crop the average subsidy is estimated to be in the region of 4,660 ECU/hectare. This includes a 10 per cent. premia bonus to producer groups as an encouragement to grow better quality, more marketable tobacco. Premia payments are also differentiated to favour the more marketable tobacco varieties. In addition a Community conversion programme is also available to encourage growers to switch to better varieties or other crops. The regime will be reviewed again in 1996 and the Government continue to press for further reform.