One of the main reasons why NI farmers receive the highest area payments per hectare anywhere on these islands goes right back to 1990s, when beef producers made best use of the suckler cow premium and beef special premium schemes.
When everything was added up, a suckler cow and her calf were able to avail of around £470 in subsidy.
Area-based entitlements
From 2005 that link to production was broken, and area-based entitlements introduced, with their value mainly based on subsidies claimed from 2000 to 2002.
In effect, under the new system many beef producers still had high rates of payment per hectare, and those payments were retained right up to 2014.
Those who think the suckler sector will go on regardless need to think again
However, in the last CAP reform, implemented from 2015, NI started down a path of flat area-based payments, to be fully in place by 2021. So money that was originally targeted at subsidising high-cost beef production throughout Europe (and insulated producers against low profitability), is gradually being evenly spread across all land-based sectors.
There is now a new uncertainty here due to Brexit, and if payments are cut substantially after 2022 (or removed altogether), what happens our beef industry?
Those who think the suckler sector will go on regardless need to think again.
Future for sucklers
It is understood that recent benchmarking results suggest that a suckler-to-beef producer makes on average, around £50-100 of net profit per hectare, before any personal drawings.
There are some who make considerably more, but also plenty who have negative margins. So on average, a farmer with 75ha (185ac) is making a net profit around £5,000.
Of course, that is before direct payments are added in, and taking the NI average of €330/ha, it would take that margin to a more respectable £27,000.
Difference
But if those direct payments were not there, what price would beef need to be to make up the difference?
Assuming that on average, 550kg of liveweight is produced per hectare (a good level of performance), and sold at 200p/kg live (or 363p/kg dead), prices would need to rise to 254p/kg live (which equates to a beef price of 462p/kg) just to give the same income as now.
It is a beef price that far exceeds any other major beef-producing country, and a price that the current market simply could not support.
Scots and Irish push for suckler payment
Despite the move to area-based payments across Europe, member states are still allowed to target payments at vulnerable sectors. Normally, up to 8% of direct support can be used to fund coupled payments.
Support
At present, 24 out of the 28 member states target money at the beef sector, with support typically in the region of €100-200/suckler cow.
Included within those paying coupled support is the UK, more specifically Scotland, where a scheme targeting payments at beef-bred calves out of the suckler herd has operated since 2005.
In 2017, the scheme paid at a rate of £99/calf in mainland Scotland and £144/calf on Scottish islands. It is a scheme the Scots are keen to continue after the UK exits the EU.
There is also growing pressure for a suckler payment in the Republic of Ireland, one of only four EU member states that doesn’t fund support at the beef sector.
The Irish Farmers’ Association (IFA) has lobbied for a new €200/cow suckler payment. Without it, the IFA argues that the herd will contract, resulting in land abandonment in marginal areas and contraction of rural communities.
However, in the South, while CAP direct payments might be under some pressure after 2020, a radical reform looks unlikely. In NI, we have guaranteed payments to 2022, and with Brexit a very uncertain landscape after that. It could be argued that the suckler cow is in a much more precarious position north of the Irish border.
NI suckler industry in numbers
There were 267,102 suckler cows in June 2017, of which 46% were in the severely disadvantaged area. The county breakdown are: Antrim 49,114; Armagh 32,297; Derry 33,795; Down 42,894; Fermanagh 45,679; Tyrone 63,323.59% of all NI farms have suckler cows (14,724 farms out of a total of 24,956). Read more
Pressure mounting for €200 suckler cow payment
NBA NI to explore suckler payment
One of the main reasons why NI farmers receive the highest area payments per hectare anywhere on these islands goes right back to 1990s, when beef producers made best use of the suckler cow premium and beef special premium schemes.
When everything was added up, a suckler cow and her calf were able to avail of around £470 in subsidy.
Area-based entitlements
From 2005 that link to production was broken, and area-based entitlements introduced, with their value mainly based on subsidies claimed from 2000 to 2002.
In effect, under the new system many beef producers still had high rates of payment per hectare, and those payments were retained right up to 2014.
Those who think the suckler sector will go on regardless need to think again
However, in the last CAP reform, implemented from 2015, NI started down a path of flat area-based payments, to be fully in place by 2021. So money that was originally targeted at subsidising high-cost beef production throughout Europe (and insulated producers against low profitability), is gradually being evenly spread across all land-based sectors.
There is now a new uncertainty here due to Brexit, and if payments are cut substantially after 2022 (or removed altogether), what happens our beef industry?
Those who think the suckler sector will go on regardless need to think again.
Future for sucklers
It is understood that recent benchmarking results suggest that a suckler-to-beef producer makes on average, around £50-100 of net profit per hectare, before any personal drawings.
There are some who make considerably more, but also plenty who have negative margins. So on average, a farmer with 75ha (185ac) is making a net profit around £5,000.
Of course, that is before direct payments are added in, and taking the NI average of €330/ha, it would take that margin to a more respectable £27,000.
Difference
But if those direct payments were not there, what price would beef need to be to make up the difference?
Assuming that on average, 550kg of liveweight is produced per hectare (a good level of performance), and sold at 200p/kg live (or 363p/kg dead), prices would need to rise to 254p/kg live (which equates to a beef price of 462p/kg) just to give the same income as now.
It is a beef price that far exceeds any other major beef-producing country, and a price that the current market simply could not support.
Scots and Irish push for suckler payment
Despite the move to area-based payments across Europe, member states are still allowed to target payments at vulnerable sectors. Normally, up to 8% of direct support can be used to fund coupled payments.
Support
At present, 24 out of the 28 member states target money at the beef sector, with support typically in the region of €100-200/suckler cow.
Included within those paying coupled support is the UK, more specifically Scotland, where a scheme targeting payments at beef-bred calves out of the suckler herd has operated since 2005.
In 2017, the scheme paid at a rate of £99/calf in mainland Scotland and £144/calf on Scottish islands. It is a scheme the Scots are keen to continue after the UK exits the EU.
There is also growing pressure for a suckler payment in the Republic of Ireland, one of only four EU member states that doesn’t fund support at the beef sector.
The Irish Farmers’ Association (IFA) has lobbied for a new €200/cow suckler payment. Without it, the IFA argues that the herd will contract, resulting in land abandonment in marginal areas and contraction of rural communities.
However, in the South, while CAP direct payments might be under some pressure after 2020, a radical reform looks unlikely. In NI, we have guaranteed payments to 2022, and with Brexit a very uncertain landscape after that. It could be argued that the suckler cow is in a much more precarious position north of the Irish border.
NI suckler industry in numbers
There were 267,102 suckler cows in June 2017, of which 46% were in the severely disadvantaged area. The county breakdown are: Antrim 49,114; Armagh 32,297; Derry 33,795; Down 42,894; Fermanagh 45,679; Tyrone 63,323.59% of all NI farms have suckler cows (14,724 farms out of a total of 24,956). Read more
Pressure mounting for €200 suckler cow payment
NBA NI to explore suckler payment
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