Huge BSEcosts
Huge BSEcosts
– support threat
By Philip Clarke
CUTS in support payments are looking increasingly likely as the cost of dealing with BSE on the Continent spirals out of control.
Addressing farm ministers in Brussels this week, EU farm commissioner, Franz Fischler admitted he had badly underestimated the full impact of the problem. "The latest market conditions are alarming," he said.
Initial estimates of a 625,000t surplus had been torn up. New figures suggested the beef mountain could reach 1.5m tonnes this year, climbing to a massive 2.3m tonnes in two years time.
That would bust the budget in no time, even if the commissions "purchase for destruction" scheme succeeds in removing a hoped-for 500,000t of cow beef. "We are at the very limit, beyond the limit, of what we can fund from the budget," said Mr Fischler.
But, despite the burgeoning bill, farm ministers were adamant this week there would be no more money available from EU coffers. "I cant see any possibility of going beyond the existing budget," said Swedish minister and council president, Margareta Winberg.
Addressing the European Parliaments agriculture committee on Tuesday (Jan 30) she said reducing direct payments to producers by modulation and degressivity were both possibilities.
But UK farm leaders are adamant that British farmers should not be penalised. "We have spent almost five years tightening up our own act, and yet Germany is only now beginning to look for BSE," said Scottish NFU president, Jim Walker. "I dont see why farmers here should have to pick up the bill for countries who denied for so long they had a problem."
NFU head of food and health, Stephen Rossides, said Brussels should look to budgets other than agriculture. He urged heads of state to consider a fresh cash injection.
Given the scale of the crisis, and the fact the EU can only store 1m tonnes of beef, the commission is also looking to cut production.
Among the options put to this weeks council were: the reintroduction of calf slaughter schemes and early marketing premiums; cuts in suckler cow quota; reductions in stocking rates for extensification premium; and individual quotas for beef special premium. Mr Fischler said he would bring more detailed proposals to the next farm council on Feb 19.
National Beef Association chief executive, Robert Forster, insisted the UK did not need calf processing or beef quotas. It was trying to rebuild its beef herd, not shrink it. And any attempt to cut suckler cow quota would be "utterly unfair", since the UK had the biggest herd in Europe.
"We should not be made to pay for problems arising elsewhere on the continent," he said. "We are not contributing to the beef-mountain. That is down to incompetence in Germany and Italy."
• Savings in export refunds due to the weakness of the k have helped the commission find another k971m (£618m) to deal with BSE.
Most of the money (?700m) will be used to pay for the EUs "purchase for destruction" scheme, for over-30-month animals, with the rest used for BSE testing and a limited amount of intervention.