22 June 2001

Union leaders slam bid to cut EU beef output

By Philip Clarke

LOWLAND beef producers will be the hardest hit by a new Brussels package intended to re-balance EU markets devastated by the BSE crisis.

The deal, agreed by farm ministers in Luxembourg, seeks to cut output by reducing beef special premium, lowering stocking rates and forcing some producers to include heifers in their suckler cow premium claims.

It has been strongly criticised by farm leaders.

NFU president Ben Gill described it as "misguided", NFU Scotland president Jim Walker said it was "damaging", while Ulster Farmers Union president Douglas Rowe suggested ministers were "confused".

Beef finishers are being targeted by lowering the national ceilings for BSP for the next two years. For some member states, this will mean a cut of 20%. But for the UK the reduction is just 4% to 1.362m claims a year. This would amount to a loss of premium of £5.3m, applied through scalebacks.

But doubts remain whether this new ceiling will be exceeded at all, following the decision to reduce stocking rates for extensification premium claims. These are coming down from the current 2 livestock units/ha to 1.9LU/ha next year and 1.8LU/ha in 2002.

"This will hit lowland producers especially hard and will cut the total number of premium claims the UK makes," said NFU beef adviser, Kevin Pearce. "The EU keeps talking about wanting to support this sort of grassland beef production. But this has the exact opposite effect."

There is one crumb of comfort, however. Due to the foot-and-mouth situation, UK producers are being excluded from a new rule, which stipulates that all claims for suckler cow premium must include between 15% and 40% heifers. The UK will not have to include any in 2002 and just 5% in 2003.

Farm ministers also agreed to reintroduce the 90-head limit for BSP, to suspend allocations of suckler cow quota from national reserves (except in the UK), and to raise this years ceiling for beef going into intervention from 350,000t to 500,000t.

EU agriculture commissioner Franz Fischler said the measures were essential to rebalance the market. Despite the fact that EU demand is now only 8.8% down on pre-crisis levels, compared with a 25% drop in February, the backlog of cattle on farms would soon be coming forward.

Consumption would not return to normal for two years, he added, while intervention stocks would have to be disposed of. "This package should lead to a production reduction to create that space on the market," said Dr Fischler. &#42