Agri-money deadline looms for EU ministers

21 July 1998

Agri-money deadline looms for EU ministers

By Philip Clarke, European Editor

THE pressure is on European farm ministers to speed up talks on a new agri-money system for Euro stay-outs.

EU farm ministers, meeting in Brussels this week, said farmers and traders would need plenty of time to understand and prepare for the new system to convert EU subsidies into national currencies for those countries staying out of the Euro. The new deal is due to take effect from 1 January, 1999.

Under the current proposals, the complex system of fixed green rates will be replaced by daily market rates of exchange (between the Pound and the Euro) for working out income supports and export subsidies. Compensation will be paid to farmers who are adversely affected.

In the first round of substantive talks on the subject, most countries welcomed the commissions proposals, which will be simpler and cheaper to operate.

Germany and the Netherlands argued that decisions should be delayed until late December, so that the extent of any compensation would be known before ministers had to sign up to an agreement. But this was opposed by most other member states, who supported the Austrian presidencys aim of wrapping it all up in October.

UK farm minister Dr Jack Cunningham supported the use of daily exchange rates. But the other non-Euro countries – Sweden, Denmark and Greece – preferred a system of average monthly rates to ease the administrative burden.

As for paying direct income aid to UK farmers in Euros, Brussels has said this will be acceptable as long as those taking up this option were no better off than those receiving their money in Sterling.

This would mean that, should Sterling weaken between 1 July, when area aid is determined, and November, when the money actually goes out, Euro-payments will have to be reduced to maintain the status quo.

The commission says this is legal, though the UK is entitled to come up with a better system if it can think of one.