January 20th 2001

New sheepmeat proposal in February

By Eric Donald

IN Brussels this week, the EU Agricultural Commissioner Franz Fischler gave a wide ranging interview to Europe's leading agricultural media including the Farmers' Journal.

Q. The EU's sheep premium scheme is effectively a deficiency payment. Is there a need to change this regime?

A. We need to make the support payments to sheep farmers safer in the context of any new WTO deal. It is not in their interests to continue with the present system. The current premium is not in line with our approach in other sectors, so we need to find a way to solve this problem. We expect to present a proposal to the council in February to change the sheep premium system.

Calf processing scheme

Q. Do the European Commission have any plans to reintroduce the calf processing scheme, which was used in 1996 to deal with the beef surplus arising from the BSE crisis at that time?

A. It was agreed in Berlin that this scheme should cease. However, the option of reintroducing it was included in the conclusions of the Berlin agreement. If a member state wishes to operate the scheme again, it must be financed with national money.

Q. Would it not be more desirable than the destruction scheme for over 30 month cattle, which is currently being operated in different member states?

A. Some of the discussion and comments on this scheme are unbelievable nonsense. The reality is that not a single extra animal will have to be slaughtered as a result of this scheme. These animals would have been killed anyway. We are not the big cattle killers of Europe.

We were confronted with a situation where farmers had no chance to sell their animals to the slaughter house because there were no markets. It was really necessary to do something, so that farmers have the possibility to get animals slaughtered. The destruction scheme is a cheaper way of dealing with this surplus than intervention. We would also have had to change all our rules for intervention, because female beef can't go into intervention and cows are worst affected by this crisis.

There is the risk that if we put this beef into intervention, then in two years time, there could be additional requests for labelling that are not there at present, leaving the product unsaleable.

Q. What is happening with the stocks of meat and bonemeal?

A. Some people are storing it. It cannot be exported or fed to livestock. It has not been decided what happens in six months at the end of the temporary ban. If we ban meat and bone meal permanently, then will we have to ban all imports of meat with bones in them, because there is no country in the world outside the EU, where the use of meat and bone meal is forbidden.

All things will have to be considered after the six months. Our scientific advice is that there is no risk from feeding meat and bone meal to non ruminants. But, a risk analysis is necessary to see if we are able to control the proper use of meat and bone meal for non ruminants.

Fishmeal

Q. Is fishmeal included in the current ban?

A. No it can be used for non ruminant animals.

Q. Commissioner, you're reaction to the news that a case of BSE was found in an animal in your native country of Austria?

A. It was a seven year old cow from a very small farm near the border with Germany. It was sold last November and was transported to Germany. The test did not give a clear positive or negative. The test used was not the prionics tests, but a French test, so we will have to await confirmation.

Q.  What comments would you like to make on the recent developments in Germany and the appointment of a new Minister for Agriculture from the Green party?

A. I think that when the dust settles that people will begin to look more rationally at what is going on. There are many concerns in Germany and these are justified, but the situation is not new to us. There is no need to reinvent the wheel, but they will have to start looking at agricultural production from the consumers point of view. Markets are driven by consumer demand and issues like food safety and quality will have to be dealt with.

CAP review

Q. What is likely to be included in the mid term review of the CAP?

A. We will be sticking to the objectives agreed in Berlin. Having said that there is obviously a new urgency in relation to beef. When and how will we resume market balance?

There are a number of sectors that must be looked at like oilseeds and milk. I would prefer to do it all together. For example it would be impossible to look at the beef sector, without looking at the milk sector.

But, one thing I do want to stress is that any reforms will not arise as a result of pressure from the WTO or enlargement. It will have to be in our own interests, in the interests of member states to make change. We will implement our own reforms and then negotiate on WTO and enlargement from within that position.

Q. Are you confident that the EU's system of farm support can be defended in the WTO talks?

A. We are in a good position and no one can criticise us if we ask for the same treatment on exports as everyone else. All export subsidies must be considered.

I am convinced that our new way of supporting agriculture through direct payments to farmers is less trade distorting than the way the Americans support their farmers. Their system is more trade distorting, because their farmers don't receive any signals from the market place.

Milk quotas

Q.  What is the Commission's latest thinking in relation to milk quotas and their possible abolition?

A. We will have to review the milk quota system because it was agreed in Berlin that the current system comes to an end in 2006. Some member states are in favour of the total phasing out of milk quotas. However other member states believe that a new quota system should be introduced when the present system ends.

We will analyse market developments to determine if we can compete on world market with products such as cheese for which demand is increasing.

So, in the future we will describe different options and the consequences of these options to the member states for them to decided on the path for the future.

If we phase out quotas, then it must be announced in advance to give farmers a chance to adapt and there must be a long phasing in period.

The level of milk produced in the EU is at its limit under the present price system. We foresee problems with the price levels if the quota system was phased out.

Q. The support price for cereals was reduced by 15 per cent under agenda 2000, but a larger reduction was originally proposed. Is there any danger that the Commission might introduce a larger cut as part of the mid term review?