Like their fellow producers in Western Europe, Britain's grain farmers are bringing in a bounteous harvest this autumn. On many farms, granaries are full to overflowing as economists predict record cereal production of more than 25 million tons. But the farmers' apparent good fortune may not translate into huge profits. And for the 10-nation European Community massive piles of wheat, barley, and oats may soon become a problem.
The reason: Record-breaking food production puts pressure on the EC's farm policy, which operates a price support system that has already led to a series of damaging political quarrels among the governments of the 10.
The system encourages overproduction and produces enormous surpluses of food. In the EC's short history, butter mountains, wine lakes, and milk oceans have been created by farmers determined to produce more and take advantage of artificial market mechanisms that require the European Commission in Brussels to ''intervene'' and pay farmers assured prices for their produce.
It is into this trap that the 1984 grain harvest may tumble. New strains of grain may be responsible for the high yields. Some types of wheat, for example, produce as much as four tons per acre. But to obtain higher yields, farmers have moved away from quality wheats which are milled for flour to grains suitable for animal feed. Since yields are rising, market forces are likely to depress prices.
A year ago, British farmers could get more than (STR)118 ($146) a ton for feed wheat. This season the average price may be only (STR)100 ($124). That is why British farmers, like their counterparts in France, West Germany, and the rest of the EC are counting on help from Brussels, where the intervention price for feed wheat is (STR)116 ($143) a ton. But that may raise, in a new form, the problem of how much intervention by Brussels there should be.
EC milk producers were ordered this year to make heavy production cutbacks because Brusssels could not go on subsidizing dairy overproduction at the level of the past two or three years.