Farming: Stay-at-home lambs eat away profits

Farmers' reputation for moaning doesn't help them a time of genuine difficulty. But is the crisis as bad as they claim? Stephen Goodwin, Heritage Correspondent, listened to farmers' complaints as sheep prices follow beef into the depths.

Les Armstrong knew the lamb crisis was here well before the Brussels bombshell about meat on the bone. "We haven't taken any sheep to market for two weeks because we can't afford to," said the Cumbrian farmer.

The Armstrongs run a 400-acre mixed farm in the Eden Valley, overlooked by the North Pennines. It provides a living for three families, Les and his brother, who farm with two of their sons, and a hired-hand. But if the slump in the farm's income in beef, lamb and milk continues, the employee may have to go.

Farm economics make betting on the future market look simple. Normally the Armstrongs sell about 40 sheep at nearby Lazonby market every week. Last year at this time lambs made pounds 58 a head but the brothers reckon they would be lucky to get pounds 38 this week.

Why? The flat-capped protesters at ports complain about a strong pound but that is only one factor in the crash in lamb prices. Compared with last year there are at least 1m more lambs in the fields. With a good grazing season, farmers have not rushed to market. Many who bought stock in the summer for fattening actually paid more in August than it would fetch now. There is also plenty of other meat in the shops; pig production is up and at Christmas shoppers think poultry.

But Les Armstrong he cannot hold back from selling for long. The age at which sheep can be sold as lamb - 12 months - is fast approaching. Last week's call from EU scientists for a ban on the sale of certain types of lamb on the bone only adds to the predicament.

In recent days there have been caustic reminders from experts, comfortably distant from the farm yard, of the fat years that followed the collapse of the pound. Total farm income in the United Kingdom soared to pounds 5.2bn in 1995 but is expected to down at pounds 3.5bn for this year, close to the 1992 level.

With 15.2 million lambs under 12 months old, Britain has the biggest sheep flock in the EU and almost 50 per cent go for export. Mr Armstrong expects his income from sheep to be down by pounds 15,000-pounds 20,000 this year. He complains of a "double whammy" from the strength of the pound. Exports have been lost while the EU subsidy for his 850 ewes has dropped because it is fixed in ecus.

The NFU has appealed to the Government to get another pounds 980m from Brussels under a scheme to compensate farmers hit by currency fluctuations. But in a blunt rejection, the Minister for Agriculture, Fisheries and Food, Jack Cunningham, said nearly all the money - about pounds 838m - would have to come from the British taxpayer. The only ray of hope is for hill farmers with Maff officials hinting at a pounds 100m increase in subsidy.

Tim Bennett, who farms 160 acres in Carmarthen, Dyfed, said the rural economy was on the brink. He is losing money on the beef bulls he takes to market and the milk he sells from 60 cows. A year ago he was getting 25p a litre, now the price is less than 20p. "We are facing a severe recession in rural Britain. Not just farmers but the jobs of thousands of people who work in abattoirs, shops and market towns are threatened," Mr Bennett said.