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European Flax Growers Face Area Aid Cut

Posted on July 18, 2000

By AgWeb.com

European flax and hemp growers face a substantial cut in their area aid payments next season, after agriculture ministers there voted to reform the regime.

Changes decided in Brussels, Belgium late on Monday will see the annual support budget cut from the current $147.3 million to about $52.4 million.

The deal, which shifts payments towards processors rather than growers, was welcomed by European farm commissioner, Franz Fischler.

He said the revised scheme would put an end to so-called “premium hunting” by farmers simply growing the crop to claim “excessive” aid payments.

“This reflects the new commercial reality,” said Fischler. Processors will be paid a supplementary aid, with the intention that some of this will be passed back to growers in the form of higher prices.

A new system of maximum guaranteed quantities is also being introduced, limiting the UK to 12,150 tonnes at the full rate of processing aid.

The National Farmers’ Union said the deal was better than that originally proposed by the European Commission. That would have paid just $37.4/tonne processing aid instead of the $84.2/tonne finally agreed, said the union’s Stuart Thompson.

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