2 February 1996

EC cuts subsidies

THE European Commissions latest cut in dairy export subsidies are "too brutal and too soon", milk representatives have warned.

In its latest move, Brussels has suspended export certificates for a week. And export subsidies on skimmed and whole milk powder have been slashed by 10% and 5% respectively. Cheese refunds were reduced by 7% (10% in the case of Cheddar and Edam).

Despite successive cuts since last July, the commission argues the latest reductions are necessary to comply with the GATT deal. The move is also intended to ensure EU prices do not rise any further.

But a majority of member states warn the cuts are unnecessary and exaggerated. EU farm organisation COPA also warns it will put extra pressure on domestic milk prices. &#42