February 27, 2009

Scotland's beef prices may be at near record levels, but few farmers would be earning a worthwhile profit without the support of subsidies, according to the Scottish Beef Cattle Association (SBCA).

SBCA chairman John Bell said beef production remains fragile with increased returns being wiped out by higher input costs which threatens Scotland's beef breeding herd.

In the short term, the recession will lead to consumers buying less premium cuts, meaning that beef producers have to design support to ensure that cow numbers are retained or increased for the future in preparation for renewed demand that will come after the economic crisis passes, Bell said.

Scottish beef farmers currently pay about GBP70 per head on the first ten calves raised, with a subsequent payment half the rate on every marketed calf. The total cost to the beef industry, and the funds coming from other producers, reaches about GBP18 million per year. The SBCA estimates the basic payment should cover at least the first 40 calves.

Richard Lochhead, the Cabinet secretary for rural affairs, said last Friday (Feb 20) there is no chance of new money being available from the diminishing Scottish block grant from Westminister.

However, there may be chances for further support for the beef sector through a revised Scottish Rural Development Programme, which has a budget of GBP1.6 billion over the next six years.

Bell said the combination of an improved calf scheme and a heifer retention programme would provide the numbers of required cattle needed for the future.

The SBCA has called on politicians at Holyrood to address the current situation as a matter of urgency.