04 March 1998
EC dreams up "virtual cow" reform for farmers
THE European Commission has come up with a “virtual cow” concept as part of its plans to reform and simplify the Common Agriculture Policy (CAP).
The reforms, still to be finalised, include subsidy cuts for cereal, beef and dairy support prices. Farmers would be compensated by direct payments related to the size of their herds or holdings.
But under the plans, dairy subsidies would be determined by dividing a farmers milk quota by the average European Union yield of milk per cow to give a virtual cow number.
Each virtual cow would attract a payment of at least Ecu127 (£84). The farmers would be paid according to how many cows they would have had if they had an average yield rather than the number they do have.
Farmers in low-yielding countries such as Ireland, Portugal and Spain fear they will lose out.
Irish Farmers Association director Michael Treacy believes Irish farmers will be worse off because the countrys grass-based production system does not lend itself to the proposed changes. He calculates that only 70% of Irish cows will receive compensation against 116% in Holland.
But the Commission argues it is necessary to stop high-yielding cow countries to suffer disproportionately.
- Financial Times 04/03/98 page 3