Sheep Industry (Hansard, 5 February 2002)

§ Mrs. Ann Winterton
To ask the Secretary of State for Environment, Food and Rural Affairs what assessment she has made of the impact of the European Commission's decision on the levels of(a) the sheep annual premium and (b) the less favoured area supplement on the future viability of the UK sheep industry; and if she will make a statement. [31520]
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§ Mr. Morley
At the Sheepmeat Management Committee on 18 January it was agreed to set the final rate of the Sheep Annual Premium (SAP) for 2001 at 9.086 euros (£5.62). The Less Favoured Area supplement remained at 6.641 euros (£4.11).
A number of factors depressed returns to sheep farmers in 2001, in particular the closing of export markets because of foot and mouth disease. We expect returns to improve in 2002, with the reopening of export markets and the introduction of a fixed rate Sheep Annual Premium set significantly above the final rate of the premium for 2001.

§ Mrs. Ann Winterton
To ask the Secretary of State for Environment, Food and Rural Affairs what estimate she has made of the level of the sheep annual premium that would be payable to United Kingdom sheep producers if the British market price for lamb were used in the calculation of the sheep premium in place of the average European Union price; and if she will make a statement. [31521]

§ Mr. Morley
The calculation of the rate of the Sheep Annual Premium prior to the changes agreed in December 2001 was based on several factors related to sheep production in the European Union, not only on the

Subsidies paid directly to farmers in 2001

£

Subsidies on product England Wales Scotland Northern Ireland UK

Crop subsidies

Arable area payments on:

Wheat 330 2 16 1 349

Barley 180 5 68 7 259

Other cereal crops 22 1 5 ¹— 27

Oilseed rape 94 ¹— 9 ¹— 103

Linseed 10 ¹— ¹— ¹— 10

Peas and beans—stockfeed and human consumption 67 ¹— 1 ²— 68

Other crops 7 1 ¹— ¹1— 8

Other crop subsidies 3 ²— ¹— ²— 3

Livestock subsidies:

Beef special premium 126 24 46 46 242

Suckler cow premium 80 25 61 45 211

Slaughter premium 49 7 13 15 84

Extensification payment scheme 50 15 34 27 126

Over-30-month scheme 91 17 23 26 157

Beef national envelope 11 3 8 5 26

Sheep annual premium 74 53 42 13 182

FMD light lambs 1 2 2 ²— 5

Other subsidies:

Dairy agrimonetary compensation 56 8 6 9 79

Total subsidies on products 1,249 162 334 194 1,943

Other subsidies

Set-aside 162 1 20 1 184

Other animal disease compensation 11 1 ¹— 16 29

Less favoured areas support schemes 42 42 61 18 164

Agri-environment schemes: 145 34 34 7 220

Countryside stewardship 49 ²— ²— ²— 49

Countryside premium (Scotland) ²— ²— 9 ²— 9

Tir Cymen and Tir Gofal ²— 13 ²— ²— 13

Organic farming 27 3 5 ¹— 35

Environmentally sensitive areas 48 7 10 5 71

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average market price; for this reason it is not possible simply to substitute the British average market price for the European Union one. However, in 2001 the average market price for sheepmeat in Great Britain was some 24 per cent. below the European Union average price, and calculating the rate of the Sheep Annual Premium separately for Great Britain and for the rest of the European Union would have increased the rate in Great Britain and reduced it elsewhere.
From 2002 the Sheep Annual Premium will be at a fixed rate of 21 euros per eligible animal, and will not be affected by fluctuations in market prices.

Subsidies paid directly to farmers in 2001
£
Subsidies on product	England	Wales	Scotland	Northern Ireland	UK
Crop subsidies
Arable area payments on:
Wheat	330	2	16	1	349
Barley	180	5	68	7	259
Other cereal crops	22	1	5	¹—	27
Oilseed rape	94	¹—	9	¹—	103
Linseed	10	¹—	¹—	¹—	10
Peas and beans—stockfeed and human consumption	67	¹—	1	²—	68
Other crops	7	1	¹—	¹1—	8
Other crop subsidies	3	²—	¹—	²—	3
Livestock subsidies:
Beef special premium	126	24	46	46	242
Suckler cow premium	80	25	61	45	211
Slaughter premium	49	7	13	15	84
Extensification payment scheme	50	15	34	27	126
Over-30-month scheme	91	17	23	26	157
Beef national envelope	11	3	8	5	26
Sheep annual premium	74	53	42	13	182
FMD light lambs	1	2	2	²—	5
Other subsidies:
Dairy agrimonetary compensation	56	8	6	9	79
Total subsidies on products	1,249	162	334	194	1,943
Other subsidies
Set-aside	162	1	20	1	184
Other animal disease compensation	11	1	¹—	16	29
Less favoured areas support schemes	42	42	61	18	164
Agri-environment schemes:	145	34	34	7	220
Countryside stewardship	49	²—	²—	²—	49
Countryside premium (Scotland)	²—	²—	9	²—	9
Tir Cymen and Tir Gofal	²—	13	²—	²—	13
Organic farming	27	3	5	¹—	35
Environmentally sensitive areas	48	7	10	5	71