Brussels, 27/02/2001 (Agence Europe) - During the meeting of the Agriculture Council, which ended during Monday night, the European Commission acknowledged the fact that the crisis in the beef sector was an "extraordinary event" that could warrant the granting of national aid by the Member States, on condition that they respect the criteria of the guidelines for agricultural aid: - such aid should be fully notified before payment is made; - losses in stockfarmers' income should be of an exceptional nature, that is quite different from the cyclical variations on markets; - aid should be limited in time and not engender financial over-compensation of farmers. EUROPE recalls, however, that the Council, by unanimous decision, may decide to clear State aid considered illegal by the Commission.
Commissioner Franz Fischler criticises the disparities in the quality of information on national aid so far forwarded to him by the Member States. He was willing to examine such aid on a "case by case" basis in a positive and rapid way and a "benevolent eye". One group of countries (France and Spain in the lead, supported by Belgium, Luxembourg and Austria) would have liked to have a political signal pointing to the payment of direct Community aid, but it came up against the intransigence of Germany and the Netherlands, in addition to that of the Commission repeating that the coffers were empty. France has already announced that it hoped to disclose its aid plan on Thursday. Some countries like Spain and Belgium may follow closely behind, while Germany is accused by Paris of having already granted public aid (not notified to the Commission) for the sale of low-price beef and veal to Russia.
Member States have no common line of action on CMO for beef
The Council adopted the Swedish Presidency's Conclusions at the close of the first policy debate on the Commission's seven-point plan aimed at adjusting the CMO for beef and veal. It is mentioned that several delegations felt the measures proposed were not of a kind that would face up to the problem, that they were not sufficient to rebalance the market in the medium term, or for the aid plan for producers. The Council adds that several countries have not, for several reasons, been able to take a favourable stance on the proposal aimed, in the short term, at introducing a special purchasing system to replace the current destruction system. By way of conclusion to the work, the Council entrusted the Special Agriculture Committee with the task of making, in the light of the present deliberations, a more detailed analysis of the problems referred to it, and to draft a report on this during the next ministerial session of 19 March.
The stances taken by ministers on the Fischler plan have not really evolved compared to those of experts from the Special Agriculture Committee (see EUROPE of 24 February, p.8). They may be summarised as follows: - replacement of the purchase for destruction scheme by a special purchasing system (under Commission competence in the context of the management committee): Germany, Netherlands, Denmark and Finland challenge the principles of this system whereas France, Belgium, Austria, the United Kingdom, Luxembourg, Ireland, Spain, Sweden and Portugal support it while giving preference to the destruction of cattle rather than to storage; - suspension for two years of the intervention ceiling (350,000 tonnes per year): preliminary agreement by France, Spain, Belgium, Austria, Luxembourg (Portugal, Sweden and Greece are open) and opposition by Germany, the Netherlands and Italy; - the setting in place of an individual rights system for the bull-calf premium: opposition on the part of most countries (Germany, the United Kingdom, Ireland, Italy, Denmark, Belgium, Sweden, Finland, Portugal and Greece); - promotion of extensification that makes the limit of 90 animals per farm compulsory in order to benefit from the bull -calf special premium: Italy is in favour of this while Germany, Portugal, France, Austria, Belgium and Greece remain undecided; - modification of the conditions for granting the suckler cow premium: reservation on the part of Member States, with only Denmark giving its approval; - reduction in the number of gross cattle units (UGB) per hectare (from 2 to 1.8): the United Kingdom, Italy, Austria, Portugal seem willing to accept this measure; - the use of set aside land for the production of organic fodder: a favourable welcome on the part of most countries.
No to acceleration of institutional price reductions for beef and veal
During this debate, Germany, Denmark and the Netherlands recommended reductions in the basic and intervention prices in the sector. According to the provisions of Agenda 2000, this 20% reduction in prices will be carried out in three identical stages from the harvesting year 2000/2001 on. Denmark suggested reaching such a reduction in two years instead of three, that is, in 2002. France, Spain, Belgium, Austria and Luxembourg supported Mr Fischler in his refusal to question reform of the CAP finalised by the Heads of State and Government in Berlin in 1999. The Commissioner pointed out that a 1% price reduction would result in a loss of income for European farmers by way of EUR 200 million. Spain is the only country that requested examination of the possibility of reviewing financial perspectives, but was not supported in this.
In addition to the acceleration of price reductions, some countries proposed alternative solutions for righting the balance between supply and demand to some extent, but the Commission did not consider such solutions feasible. France, the United Kingdom and Ireland give preference to purely and simply destroying beef, either in the form of a premium for processing of veals (formerly the Herode premium) or in the form of withdrawal for destruction. Germany reportedly hinted that it would table on a reduction of average weight and age of cattle sent to slaughter. In the medium term, German Agriculture Minister Renate Künast would propose decoupling of premiums depending on production and the longer term establishment of a "green earth" premium (linked to environmental quality).
Furthermore, the Council discussed:
- Aid to young farmers: The Italian delegation drew the Commission's attention to the difficulties encountered by certain young farmers for fulfilling the eligibility criteria for aid to help them start up. Mr Fischler recalled that such aid, provided for in the context of rural development, aims to encourage young people to start up an activity and that it is therefore logical for them to present their request before they establish their activity. He nonetheless recognised that a certain degree of flexibility must remain possible at the beginning of a new planning period, which is the case for the year 2000.
- Distillation of wines: Commissioner Fischler pointed out that the Spanish request concerning the authorisation for crisis distillation of 2.6 million hectolitres of wine must still be examined for several weeks before a decision is taken by the wine management committee.