Unless that action is now taken, it is imperative to adopt measures at this stage to reduce the production of cereals, a 1991 memo to Government, released by the National Archives, said.
In 1991 cereal production in the EU exceeded the capacity at grain merchants and exceeded demand, as a result more grain was being put into intervention stocks.
The memo states that intervention stocks had “increased from about 11 million tonnes last year to a current level approaching 20 million tonnes (some 100,000 tonnes are in storage in Ireland)”.
This urgent action came in the form of two proposals from Europe to reduce the area under cereals
The Commission had estimated that stocks would grow to more than 28m tonnes by the end of 1992, unless “urgent action” was taken.
This urgent action came in the form of two proposals from Europe to reduce the area under cereals – a co-responsibility levy and a temporary set-aside scheme.
The Government said the Commission proposed that the levy should be doubled to 6%, to £8.88 per tonne, for the 1991/1992 marketing year.
On the set-aside measure it said: “The Commission proposes to introduce a special scheme to encourage temporary set aside of land used in 1991 for cereals or other supported arable crops. The scheme will provide that producers who set aside 15% of such land for the 1992 harvest, will have their 1991 co-responsibility levy payments reimbursed in 1992.
“In addition, participants will benefit from the existing community element of the set-aside premium (£56.06/acre) and at the discretion of the member states a national element of £30.19 per acre may also be paid”.
The minister of the day Michael O’Kennedy was opposed to the doubling of the levy, on the basis that it would cut incomes
The Government of the day acknowledged that cereal incomes had become “severely depressed” and that the increase in the levy to 6% would cost the sector £7m in 1991, however the memo also said that “set aside would be attractive and many small and medium sized cereals producers may be tempted to opt into the scheme”.
The minister of the day Michael O’Kennedy was opposed to the doubling of the levy, on the basis that it would cut incomes, but the memo noted that he believed that more attractive arrangements could be devised.
“For example, increasing the rate of the [EU] funded set-aside element of the premium where over 15% of land is set aside.”
This set-aside option was not taken up at the time by Ireland, however it was a precursor for the introduction of the farm retirement scheme.