Beef support cuts likely

15 January 1999

Beef support cuts likely

By Philip Clarke, Europe editor

SIGNIFICANT cuts in beef support prices look increasingly likely, following the first meeting of a high-level working group in Brussels this week.

The group has been established to speed up negotiations on the Agenda 2000 reforms, as farm ministers try to meet the 25 March deadline for agreement.

Discussions this week focused on the beef and dairy regimes, where the EU Commission is seeking 30% and 15% price cuts respectively.

“A majority of member states now go along with the commissions proposal [on beef],” said a spokeswoman. “They recognise that anything less than 30% will do nothing to solve the markets problems.”

While France and Ireland are expected to hold out for a lower price cut – 15% has been mooted – the real arguments will now focus on the level and method of compensation to farmers.

A number of member states, including the UK and Denmark, supported the current commission proposal for top-ups to all existing headage payments, (worth about 80% of the price cut), plus the introduction of a dairy cow premium, at this weeks meeting.

They also accept that half the extra aid should be paid into a national envelope.

But others, notably France and Austria, wanted a more radical shift in the allocation of funds, away from beef special premium and towards suckler cows and extensification. They argued that grass-reared animals did not benefit from lower cereal prices, so deserved more support.

A third option, spelt out in a paper from the German presidency, suggested doing away with beef special premium and extensification payments altogether, replacing them with a single slaughter premium paid at one rate on all finished animals throughout the EU. Suckler cow premium could be retained, where appropriate.

The idea won support from Italy, Germany and the Netherlands who, with their predominantly intensive beef rearing systems, have lost out under the current regime due to the 90 head limit on beef special premium.

But most member states acknowledged that a single slaughter premium would not be compatible with World Trade Organisation rules, because it would be linked directly to production. The commission was therefore asked to refine this proposal and come up with some more detailed costings in time for next weeks farm council meeting.

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