Fischler set to reject pig farmers’ aid bid

Date: 08/10/1998

By Myles Neligan

FARM Commissioner Franz Fischler is set to reject calls for emergency measures to support EU pig farmers, many of whom are facing ruin because of falling prices and the loss of Russian export markets.

His firm refusal to intervene will come as a disappointment to the French, Dutch, Belgian, Danish and German governments, which last week formally asked for permission to launch national programmes to support and restructure the pig-farming industry.

When he speaks at the European Parliament tomorrow (9 October), Fischler is expected to argue that the crisis in the EU pigmeat market is a cyclical phenomenon, stemming from overproduction in the past two years.

The Commissioner will point out that the Union's pigmeat industry has just enjoyed a two-year boom and argue that the present market turmoil is the result of ill-advised expansion by farmers.

He will also stress that the European Commission has responded to the fall-out from the Russian crisis by increasing export subsidies for pigmeat and introducing aid to offset the cost of storing surplus production, and expressly rule out any further support measures. "Our analysis of the situation is that the industry is in a cyclical downturn," said a Commission official. "After two years of high prices and profits, farmers increased production levels. Just as night follows day, the market is now oversupplied."

Last week, Fischler told EU farm ministers that he was reluctant to increase export subsidies unless it could be shown that there were non-Union markets ready to absorb additional EU exports. "It would be unwise to assume that there are unlimited external markets," he warned.

Fischler's staff argue that the impact of falling pigmeat prices in the EU has in any case been partially offset by proportional reductions in the price of cereals, which have reduced feeding costs.

The Commission puts much of the blame for the present crisis on bad advice from regional and local governments, which encouraged pig farmers in many EU countries to expand when market conditions were favourable.

Prices began tumbling in January. But the loss this summer of Russian markets, which accounted for one-third of all EU pigmeat exports, brought European pig farmers to their knees.