BSE crisis forces Fischler move to head off beef market surplus

Date: 08/02/01

By Simon Taylor and Laurence Frost

FARM Commissioner Franz Fischler will next week table a range of measures to prevent a huge beef surplus caused by the mad cow disease crisis.

The proposals seek to rebalance the beef market by stopping farmers from increasing the size of their herds and encouraging them to sell their cattle earlier than normal. But Fischler is backing away from plans to force member states to slaughter calves, citing fears of an outcry from animal welfare groups.

National farm ministry officials expressed scepticism that the European Commission measures would work quickly enough to deal with the scale of the BSE problem. "Some of these things will take a long time to have an effect on the market," said one.

The EU needs to take urgent steps to cut back beef production by 800,000 tonnes by next year because sales have slumped in the wake of the latest BSE outbreaks.

Fischler will offer a series of steps with short-term and long-term implications for the beef market. The main focus will be on incentives for farmers to sell cattle earlier.

He will also try to limit herd sizes by converting regional restrictions on the number of animals eligible for subsidies into limits for individual farms. Rules to encourage grass-fed production will also be tightened up.

Meanwhile, EU governments may ask the Commission to identify cuts in the farm budget to free up funding to deal with the crisis. A new €971-million anti-BSE package announced last week leaves projected agricultural spending for 2001 within a margin of just over 1% of its total limit.

Concerns will be voiced at Monday's meeting of Union finance ministers that the new spending plans put the Common Agricultural Policy (CAP) at the mercy of the markets in which it intervenes to support prices - potentially sending the budget over its €40-billion ceiling.

"You don't have to be Einstein to see there's a serious threat to the budget ceiling," said one EU diplomat. "And when the Commission identifies a threat, it's obliged to take action to make sure the ceiling isn't breached. Some countries may want to make specific proposals."

The anti-BSE package set out by Budget Commissioner Michaele Schreyer was to pay for the destruction of beef carcasses, compensation for farmers and the introduction of compulsory cattle testing earlier than planned. But farmers' groups fear Fischler and some member states could use the BSE situation to impose agriculture cuts by the back door.

"It's unfair to start moving money around from one agricultural sector to another," said Mauro Gallucio of the farmers' lobby COPA-COGECA. "Fischler shouldn't try to use the case of BSE to reform the entire policy."

Fischler's spokesman, Gregor Kreuzhuber, played down the prospect of cuts to farmers' aid before the next round of CAP negotiations. "We can't start making proposals based on market assumptions," he said

Officials say they are waiting to hear if German Farm and Consumer Protection Minister Renate Künast would call for radical changes in agriculture policy this week before reacting to Fischler's plans for reform.

Künast has indicated she favours incentives for 'green' and organic farming but any signs supporting a major shift in funding away from production would encourage Fischler to table radical reforms next year.