EU moots beef reform

13 July 2001

EU moots beef reform

FURTHER changes to the EUs beef regime look increasingly likely, after the publication in Brussels of new market forecasts for the next seven years.

The study predicts that beef will remain a problem area throughout that period, characterised by long-term falling demand and excessive stocks.

"The current unbalance in the EU beef market is likely to continue, and even deteriorate over the short term, with the creation of an internal surplus of up to 740,000t by 2003," it says. "The situation will improve in the medium term, but this is not expected to clear stocks that are forecast to stabilise at around 240,000t."

Faced with this "rather pessimistic outlook", commission sources suggest further changes will be needed after 2003. They insist the recently-agreed five-point plan, which cuts beef stocking rates and forces producers to include heifers in suckler cow premium claims for the next two years, is just an emergency measure.

Options for further reform could include moving beef support to a decoupled area basis.

On the cropping side, the commission describes the outlook as "rather favourable". "Increased competitiveness of EU cereals, the projected recovery in world markets and a favourable k:$ exchange rate will all contribute to a balance in the EU cereals market."

Wheat stocks are expected to remain stable at about 12m tonnes, while world wheat prices are forecast to climb from k135/t (£83/t) delivered to over k150/t (£93/t) by 2008.

The one problem crop is likely to be rye. Production is forecast to expand from 5.6m tonnes in 1999 to over 7m tonnes in 2008, while consumption declines due to its relatively high price. Stocks could rise from 3.8m tonnes to almost 14m tonnes.

Faced with this problem, the mid-term review could result in big cuts in intervention prices for rye and the introduction of area aid.

Overall, commission staff suggest there will be no big transfer of funds from market support to rural development, but modulation of large farmer payments could return. &#42

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