Farm ministers fail to clinch prices deal

Date: 27/06/1996

By Michael Mann

EU FARM ministers reached agreement this week on how to carve up 850 million ecu in aid to beef farmers affected by the BSE crisis, but almost four days of talks and three late nights failed to secure accords on farm prices or reforms of the fruit and vegetable sector.

Italy's Agriculture Minister Michele Pinto claimed a decision on the price proposals for 1996-97 had to be postponed because ministers' 'shopping lists' would have undermined the farm budget, now thoroughly overstretched by the 'mad cow' crisis.

Ireland will attempt to finalise a deal at the first meeting of agriculture ministers under its presidency on 22-23 July. In the meantime, existing institutional prices will be “rolled over”.

“I have to make it clear that in the 1997 farm budget according to forecasts we are right at the guideline limit. If the guideline were to be broken, finance ministers would have to find more money and, in these days of national constraint, that would not be possible,” warned Pinto.

The failure to get agreement on what should have been an uncontroversial package comes as a severe blow to an Italian presidency with few concrete successes under its belt.

Proposed amendments to the beef regime - drawn up before the outbreak of the BSE crisis - will be removed from the package and form the basis of a more detailed reappraisal of the sector which will become the priority for the Irish presidency.

After painfully slow discussions on the reform of the fruit and vegetable sector lasting several months, a deal in this area also proved beyond the reach of the Italian presidency after Spain, Portugal and Greece objected to the compromise on the table.

Agreement had looked on the cards early in the week, but was delayed when German Minister Jochen Borchert suggested it would not be wise to vote through a deal against the wishes of the main producer countries.

The main concern of the producers remains to increase the amount of financing from the EU budget to finance market support measures.

But ministers gave a generally positive response to the Commission's proposals to halve the rate of cereals set-aside to 5&percent; for next year's harvest, despite pressure from French Minister Philippe Vasseur for a zero rate. A deal is expected in July.

It took ministers until the early hours of Wednesday morning to reach a highly flexible agreement on beef aid which basically offers member state governments carte blanche on how to divide up payments for farmers.

Although the Commission's preferred option remains a basic top-up of existing premium payments, individual countries will be able to choose their own criteria for paying out the money.

Those who wish to will also be able to match EU financing with equal sums from their national budgets, provided the Commission is happy that the measures are consistent with the Union's competition rules.

In what came as something of a surprise, the Italian presidency was able to polish off an agreement on aid for the beef sector without links being made to other questions on the agenda, although a deal was only reached after a compromise text had been redrafted three times.

Ministers reached their decision following a noisy demonstration from up to a thousand beef farmers from all around the Union outside the Council building.

The compensation package, which had to be agreed rapidly to free up the money before the end of the current budget year, includes the additional 200 million ecu agreed by heads of government at their summit in Florence last weekend.