27 July 2001

Ministers make case for extra sheep support cash

By Philip Clarke

Europe editor

EUROPEAN farm ministers are demanding extra money for sheep producers as part of a deal to reform the existing support regime.

During an initial debate on the commissions proposals, ministers from France, Ireland, Spain and Austria all demanded a rise in the k21 (£12.90) a head flat rate payment and k7 (£4.30) a head LFA supplement due to take effect next year.

Mediterranean countries such as Greece, Italy and Portugal also wanted more than the k16.8 (£10.30) a head on offer for milk sheep and goats.

Irelands farm minister, Joe Walsh, said the proposal would do nothing to close the income gap between sheep producers and suckler cow producers. He also called for an extensification premium for sheep.

But, despite the large consensus in favour of upping the budget, the commission is reluctant to do so.

"One of our major concerns is to respect budget neutrality," said agriculture commissioner, Franz Fischler. He saw no reason to increase the milk sheep payment either, since studies had shown these producers were already better off than their "meat only" producing counterparts.

According to commission sources, just raising the basic premium to k24 (£14.70) a head, as suggested by Italian minister, Gianni Alemanno, would take the sheep budget to over k2bn (£1.25bn) from its current k1.82bn (£1.1bn).

"That would bust the Berlin financial ceiling for sheep and would mean we would have to look for money in other areas of the CAP," said the source.

But, given the weight of opinion in favour of raising the sheep spend, he would not be surprised if that was the final outcome.

The main sticking point, he suggested, was how to deal with the LFA supplement. The commission is concerned that all LFA sheep producers are entitled to it, yet member states can increase the size of their LFAs almost at will.

That has serious cost implications, and the commission wants to limit the top-up to areas where there are no alternatives to sheep production.

Meanwhile, UK minister, Margaret Beckett, who supported the payment rates proposed by the commission, called for more flexibility to be built into the new regime. She wants to be able to buy-up unused sheep quota to help with restructuring in the wake of foot-and-mouth.

Final decisions are expected in November, after the European parliament has given its non-binding opinion on the reforms in October. &#42