Cereals budget cut plan aims to fund beef crisis

Date: 01/08/1996

EUROPEAN cereal farmers face swingeing cuts in aid payments as Farm Commissioner Franz Fischler seeks to find the money to pay for the continuing beef crisis.

In a move which seems certain to anger farmers as well as a number of member states, Fischler confirmed this week that the Commission would ask ministers to reduce cereals aid payments by 7.3&percent; and compensation for setting land aside by a massive 26.8&percent; for the 1997 harvest.

The proposals, which would cut set-aside compensation to the same level as cereals aid, are aimed at saving 1.33 billion ecu from the 1998 budget to pay for measures to support the beef market.

“This is a more serious crisis than we have ever suffered in the sector and requires special measures. We must act quickly,” said Fischler.

But he denied that he was using the beef crisis as an excuse to take money away from cereals farmers, whom many accept have been over-compensated since the 1992 farm reform for price cuts which never really happened.

Because emergency intervention buying of beef is likely to cost around 1.3 billion ecu from the 1997 budget, Fischler also proposed delaying next year's aid payments to oilseed producers so that they would be paid out of 1998 expenditure.

Hand in hand with the controversial plans to cut arable aid, the Commission proposed a six-point plan to rebalance the beef market. Ministers will discuss this when they next meet in Brussels on 16-17 September.

Fischler aims to reduce the number of animals qualifying for the special beef premium, make the 'Herod premium' compulsory, introduce intervention for younger animals, raise the intervention limit for 1996 and 1997, encourage extensive production and limit grants for capital investment in beef farms.

Responding to suggestions that several member states would be less than happy to accept such deep cuts in aid, Fischler was blunt. “At the last Council I told ministers I would welcome any suggestions for finding the extra money to finance beef aid, but none have come,” he said.

In a separate proposal in a busy week for Fischler, the Commission adopted measures to set common standards for the production of organic meat throughout the Union.

Plugging a gap in EU legislation, the plans would define clear labelling and quality rules to prevent people marketing as 'organic' meat which did not adhere to strict standards.

Meanwhile, meat industry experts say that today's (1 August) meeting of the Standing Veterinary Committee will not formally vote on proposals to remove certain sheep tissues from the human and animal food chain.

The plan, drawn up after evidence that sheep could - in extreme circumstances under laboratory conditions - contract BSE, looks set to win the support of most countries. But a formal vote is unlikely before September.

Despite fears that this could lead to a scare similar to the one which caused beef markets to collapse, industry analysts claim there is no sign yet of any major consumer backlash.