29 March 1996

Hopes hang on intervention

AS cattle throughput and prices collapse, livestock producers are hoping intervention will provide some support to the market.

Prices have already reached levels where Brussels buying is available, though traders have not yet tendered.

"Normal" intervention requires that prices in any one member state are less than 80% of the full support price (298p/kg), while the EU as a whole must be below 84%. By the end of last week, the official GB deadweight price came to 75.5% of intervention and is expected to go much lower this week.

"Safety net" intervention is also available when prices drop to 60% in any one member state and 78% for the whole EU.

But the Federation of Fresh Meat Wholesalers believes the scheme as it stands is unacceptable.

The main point of contention, according to secretary Peter Scott, is that traders putting meat into intervention remain responsible for the quality of that product, even though it is out of their control. "The contract terms are far too open ended and we have advised our members to avoid it."

Current intervention rules also specify that meat taken in has to be marketable overseas. "British meat does not have a market now and is unlikely to have one in the near or medium future," said Mr Scott.

The current scheme is also very restrictive on what type of meat can go in, limiting intervention to R3 and R4 beef. Total purchases under normal intervention are also limited to 400,000t, though currently just 8000t are held.

As such, the NFU is pressing hard for an extension of all criteria.

"Rebuilding confidence is going to take a long time. In the meantime we urgently need to underpin the market," said head of livestock, Stephen Rossides.

In addition to intervention, the NFU is also calling for the immediate introduction of the calf slaughter scheme, as available under the MacSharry CAP reforms, to pay processors £86 a head for killing male dairy cows under 10 days old.n