30 November 2001

Just why wasnt a sheep deal done?

Leaving everything

to the last minute

is something of a

tradition in

Brussels policy-

making. Reform of

the sheepmeat regime is no

exception, as Europe editor

Philip Clarke explains

"A COMPLETE and utter shambles" and "the worst display of political ineptitude" were two of the comments picked up from normally more guarded EU civil servants following the surprise collapse of sheep reform talks in Brussels last week.

The failure to agree a new support system means that ministers have just one more chance, at their December council, to come up with a replacement for the current outmoded regime.

The decision to abandon talks was as unnecessary as it was surprising.

Belgian council president Annemie Neyts told journalists afterwards she had no choice. The longer the debate went on, the further apart the 15 member states were getting, she insisted. She was also mindful that 13 farm ministers from the EU candidate countries had been invited to dinner and should not be kept waiting.

But as every Brussels observer knows, key decisions on just about any aspect of EU farm policy are rarely taken until well after midnight. Quite why ministers did not come back after their meal to clinch a deal is a mystery.

Tantalisingly close

By all accounts they were tantalisingly close. Under the EUs voting procedure, the commission and presidency needed just 62 votes out of a possible 87 to get what is known as a qualified majority and secure the reform. When the meeting broke up they had 61.

Against them was an amalgam of six smaller member states of which between them amassed 27 votes – enough to form a blocking minority.

These included Eire, Spain and Portugal, which said the flat rate k21/ewe (£12.90) on offer plus a further k1/ewe (61.5p) in a national envelope was not enough. Sweden and Denmark also opposed the compromise, but in their case because it was too expensive. Austria blocked it because it disagreed with its share of the national envelope.

The failure to tie up the deal came as a relief to Irish farm minister Joe Walsh. He had come under intense pressure to secure a 50% increase in the premium on offer, not least from the many Irish sheep farmers hanging around the Press lounge last week. He was able to return home to subdued applause for having stood firm. But his respite may be short-lived.

Unblocking the blocking minority shouldnt be too difficult in December because only one of the six countries will have to be bought off. Austria, with four votes, is an obvious target.

The commission is unlikely to throw any more money at the problem, for fear this would bring more countries into the "no" camp. Its aim has always been to retain "budget neutrality", keeping spending on sheep in line with the three-year average of around k1.9bn (£1.17bn).

And it is unlikely to come up with any "special deals" for individual countries, like Eire. This was standard practice under Agenda 2000 because it was a wide-ranging reform. With just the sheep regime on the table, the opportunity for trade-offs is no longer there.

Green credentials

The arguments for putting in more cash are clear cut. Sheep producers are the worst paid in all European agriculture and there has been an exodus from the industry over the past decade. This is despite the fact sheep farming has green credentials and the EU is a net importer of sheepmeat.

Freezing the budget also fails to take account of rising costs and overlooks the fact next years farm spending will be k4.4bn (£2.7bn) below the official ceiling.

But Brussels has heard these arguments a thousand times and has ignored them. Instead, the commission is threatening to roll over the existing regime into 2002, promising another year of rock-bottom subsidies.

That shouldnt be necessary because the reality is that Brussels should get the deal it is after in December.

The priority will then be deciding how best to spend the extra cash in the national envelope. The reform will give member states a good deal of flexibility, such as environmental and quota buy-up schemes. But given the paltry sum of k1/ewe (61.5p) on offer, the best way will be a simple across-the-board top-up. Anything else risks another shambles. &#42