8 December 2000

MBMban hits pockets of

farmers to tune of £100m

By FWreporters

BRITISH livestock producers face a £100m increase in their feed bills this year after the announcement of fresh attempts to stop BSE spreading across Europe.

Meat and bonemeal (MBM) – widely blamed for spreading BSE – will be banned from all animal feed for six months from Jan 1, following the agreement of farm ministers in Brussels. In a further effort designed to halt the disease, all European beef from over-30-month animals not tested for BSE will be destroyed.

Both measures have been in place in the UK since 1996. But their introduction on the continent looks set to have big implications for British livestock producers. European beef sales have dropped by 40% and cattle prices have fallen 17% since October. Last week, UK deadweight beef prices slipped another £23 for a 330kg steer to 160p/kg, according to the Meat and Livestock Commission.

The supply trade body UKASTA forecasts that the knock-on effect of the European MBM ban alone will add £100m a year to UK feed bills. The price of alternative protein feeds has already soared. Soyameal climbed to a high of £193/t this week before easing back slightly to settle at £192, reported KW.

Farm minister Nick Brown said the measures were a "powerful public protection measure… designed to protect the public and restore confidence in beef across Europe". That view was echoed by NFU president Ben Gill who said: "These EU-wide controls will be a valuable step forward in the process of re-building consumer confidence in beef on the Continent and in restoring beef sales world-wide."

Mr Gill said the fact that fishmeal could still be fed to pigs and poultry would help take the steam out of the soya and rapemeal markets. But arable support payments should be enhanced to encourage farmers to grow more crops such as beans and peas to meet the increased demand for alternative proteins, he added.

European farm commissioner Franz Fischler defended the decision to destroy older cattle. Destruction would cost k140m/100,000t compared with over k200m/100,000t for normal intervention which would only remove steer and bull beef from the market. Mr Fischler added: "The aim of my proposal is to contribute to a re-establishment of a market equilibrium."

To get some much-needed cash into farmers pockets, the farm ministers agreed to increase the 60% advance beef special premium to 80%.

Brussels will also examine ways of boosting protein crops and consider further compensation measures to help producers cope with the adverse market situation.

Further details of the "purchase for destruction scheme" – such as the rates of payment to farmers and the start date – will be determined at a special beef management committee meeting next week. But the European farmers body COPA is concerned that delaying the scheme even until January will expose producers to depressed prices for another month.

COPA wants conventional intervention to be opened immediately. It has called on European Union leaders to fund further compensation when they meet for a summit at Nice this weekend.