Cereal producers reject aid cuts deal

Date: 12/09/1996

AGRICULTURE ministers face an uphill struggle to carve out a deal on European Commission proposals for sharp cuts in aid payments to EU cereal farmers.

Intended as a means of financing emergency support measures for hard-pressed beef farmers, the plans have run into fierce resistance in the Special Committee for Agriculture (SCA).

Initial discussions in the SCA have dampened optimism that the basis of a deal could be thrashed out at next week's meeting of farm ministers.

Last week saw a formal agreement postponed until late October at the earliest, after MEPs refused to give their opinion on the proposals in advance of Monday's (16 September) Council of Ministers meeting. Not for the first time, the Parliament was angered at being given too little time to consider the issues - even though farm ministers are notorious for disregarding its views anyway.

To nobody's great surprise, it is the UK and Sweden, supported by Denmark, which are backing the plan to reduce arable aid payments by 7&percent; and set-aside payments by 27&percent;.

Even though it floated the idea earlier this year of re-apportioning agricultural funding away from the cereals sector and towards meat producers, France has become noticeably cooler towards this approach in recent weeks, no doubt influenced by the presence of a number of farmers on its streets.

Germany, the other major player and one increasingly concerned with financial discipline, appears to be suggesting leaving the arable sector in peace for the moment in the expectation that money will at some stage be found from elsewhere in the farm budget.

The Mediterranean countries remain firmly opposed to any penalising of cereals farmers, emphasising the very different climatic conditions in the south of the EU to those enjoyed by northern farmers.

Several member states point out that it seems odd to propose permanent cuts in aid to one sector to finance a temporary crisis in another.

For its part, the Commission is standing firm. From the start, Agriculture Commissioner Franz Fischler has stressed that if money for beef reforms is not taken from over-rewarded arable farmers, it cannot be found anywhere else.

“The Commission has so far insisted that it has done its bit and that if the money is not raised in the way it has suggested, it cannot be blamed,” said a member state official.

The Commission's plans aim to save 1.3 billion ecu from the 1998 budget and 1.65 billion ecu the year after to finance a range of measures to rebalance a beef market crippled by the latest BSE crisis.

Commenting on the Commission's recent approach, former Farm Commissioner Ray MacSharry suggested this week that “it would be much cheaper to cut beef prices by 10&percent; and top up premiums, than to pay for intervention and higher export refunds”, adding that there was no need to change the basic mechanisms which he originally introduced.

Hinting that there should be a return to his original proposal to limit the amount of land any farmer can claim payments for, MacSharry added: “I do not look at the latest proposals as robbing Peter to pay Paul, but there should never be over-compensation.”

So far, there has not been any strident opposition to the Commission's six-point plan to assist cattle farmers, but a number of member states have expressed considerable reservations about the approach the Commission has chosen.

Both the French and British have suggested more radical measures to prop up the market, while the Germans, Austrians and Swedes have stressed the need to boost demand and support marketing schemes.

Italy, the Union's main importer, has dug its heels in over the complete package.

With little else on the Council agenda apart from the now habitual situation report on BSE, ministers can be expected to concentrate on taking the debate on this fundamental change to the CAP further than their officials have dared so far.