29-30 April Agriculture Council

Date: 02/05/1996

HOPES of a deal on the reform of the fruit and vegetable sector when EU agriculture ministers met in Luxembourg this week proved over optimistic. The debate was moved forward by the latest compromise, which would allow an extra 3&percent; of surplus production to be withdrawn annually from the market at a guaranteed price, in addition to the proposed average of 10&percent; over three years. Producer organisations would be more loosely defined and members would be allowed to sell a greater share of output directly instead of through the group. Despite progress, fundamental divisions remain over by how much withdrawal prices should be reduced, the scope of products covered, the proportion of operational funds which can be used for withdrawal, the volume of sales permitted from the farm-gate, and the relationship between members of producer groups and inter-branch organisations and those outside. Agriculture Commissioner Franz Fischler said he could accept the compromise provided there was a substantial reduction in the withdrawal price in the first year. Otherwise, he warned, the cost of the regime might rise by over 80 million ecu. The Italian presidency is still hoping for an agreement in May, although this is certain to be difficult as the meeting is likely to mark the début of whoever is named as Rome's next agriculture minister.

DURING discussions on the price package, Fischler stressed that his main consideration was the effect of any measures on the budget, already threatened by the beef crisis. However, he admitted that he might be flexible towards beef farmers, given that the market situation had changed radically since the proposals were submitted. Several member states, including Austria, Germany, Belgium, the Netherlands, Italy, Ireland and Luxembourg, spoke out against the proposal to cut monthly cereal increments and sugar storage payments. Among the other points raised were demands for measures to promote extensive beef production, maintain the second premium for bulls, allow payments for the replanting of vineyards, permit top-ups for ewe premiums in regions suffering low prices, adjust tobacco premiums to favour certain varieties, and raise milk quotas.

FISCHLER pledged a proposal on next year's set-aside rate by July, once the Commission had studied the development of the market. France and several other countries want a sharp reduction in the current 10&percent; set-aside rate for cereals and oilseeds, because stocks are tight and prices are at record levels. Sweden called for set-aside to be reduced to zero and for a major cut in intervention prices.

A NUMBER of ministers, led by the French, called for extra market support measures for beef farmers adversely affected by the BSE scare. Fischler stressed the need for budgetary discipline, as the crisis has already put a severe strain on agricultural spending. But he pledged, nonetheless, to come forward with some ideas in time for the May meeting of farm ministers which could be built into the negotiations on the price package. French Minister Philippe Vasseur, clearly concerned about his country's veal sector, suggested that calves born after 1 May be given a clean bill of health. Portugal also took the opportunity to submit an eradication plan for BSE. While the UK considers what additional measures may be necessary to persuade its partners of the effectiveness of its slaughter programme, the Standing Veterinary Committee will consider whether the ban can be lifted on gelatine, tallow and semen at a meeting on 7-8 May.