REPORTS of straw and hay becoming a target for thieves in Britain might change the minds of the country’s strong anti-CAP lobby, and their anti-CAP friends in the Netherlands, Sweden, Denmark and Malta.
Near-drought conditions have left much of Britain short of fodder for livestock this year, with reduced hay and straw yields. Straw prices have jumped 20%, and hay prices by up to 40%. These price rises have prompted thefts, with 800 bales taken from one farm in Kent. A long winter could make hay and straw very valuable by the start of 2011.
Meanwhile, electricity-generating companies are building new biomass plants, and are in the market for increasing amounts of straw – spurred on by government incentives for ‘green’ energy. As the price of fertiliser rises, following oil-price trends, chopping straw for its fertiliser value will become more attractive to tillage farmers, making this agricultural commodity scarcer.
It’s a lesson for Britain’s anti-CAP lobby on the importance of subsidising farmers – otherwise, additional, vital agricultural commodities will become scarce.
Straw is not a vital food raw material for Britain, but much of the straw comes from wheat, the grain of which is needed for bread – a vital foodstuff. Britain could as easily run short of grain for bread, and for livestock feed to produce meat and milk products. The same is true of EU countries. The grain market is so volatile that EU support must be in place to ensure supplies.
The EU had six million tonnes of grain in intervention storage entering this harvest, but that is money in the bank, not the waste of taxpayer money alleged by the British, and other anti-CAP member states allege.
Without it, the EU food industry would be panicking, following Russia’s transformation, by heatwave, from one of the world’s top grain exporters to a net importer. Grain prices soared in 2008 due to scarcity; they slumped in 2009 when the market corrected itself; and they are rising again – because even minor supply or demand shocks can trigger restrictions by big exporters like Russia, and speculators add to market uncertainty.
Now, panicky livestock producers in Britain want their government to stop grain exports, warning that British pig and poultry farming will otherwise become uncompetitive. But the EU can calm nerves by releasing intervention grain onto the market, if necessary.
The livestock producers have a point. They have to compete with Britain’s ethanol plants for grain, and with grain buyers from grain-deficit countries whose contracts with Russia cannot be filled, due to Moscow’s export ban.
Anti-CAP lobbyists would say leave grain growers unsubsidised, at the mercy of the markets. But in a panicky world of speculators, export bans, climate change, and green energy incentives, individual farmers need an EU safety net to survive in the grain business, and to deliver vital food supplies.
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