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Brussels, 23 May 2001

Outcome of the Agriculture Council, 22 May 2001

Commissioner Fischler's Agenda points

Update on the situation on the EU-beef market (see MEMO/191)

According to Commissioner Fischler, the EU beef market shows some signs of recovery. Compared to the pre-crisis situation, the latest estimates show a drop in beef consumption of 10% (to 18% last month). Also the price reduction has become less severe. Furthermore, some third countries such as Russia reopened their market for EU-beef. « This is also the result of the measures we put into place. During the first four months of this year, about 475.000 tons of beef have been withdrawn from the market, of which about 200.000 tons are now stored in public intervention.

Crisis package for the beef market

Following the opinion of the European Parliament, the Council continued its deliberations on the remaining 5 points of the Commission's « 7-points plan ».

Fischler urged the Council to make the necessary efforts to reach an agreement in June. « We should not forget that a considerable number of animals, mainly cows, is still being held back on farms, that consumption is still down and a significant part of our export markets are still blocked. This means that the intervention stocks are bound to further increase. Moreover, it is difficult to imagine that the consumption will recover to its former level, even in the long term. For all these reasons, there is no question that we have to take action to rebalance the beef market. This is not possible without the package of measures I proposed. It should also be clear that this is a "crisis management package", not a « reform », he said.

The question was referred back to the Special Committee of Agriculture (SCA).

Reform of the sugar regime

The Council agreed by unanimity to reform the sugar regime along the following lines :

  • Five year extension of the quota regime until the marketing-year 2005/06

  • Review of the regime based on Commission studies in the beginning of 2003

  • Permanent reduction of the level of quotas by 115 000 tonnes

  • Abolition of the reimbursement of storage costs, while ensuring that sugar for which storage aid has been already paid up to 30 June 2001 is not penalised

  • Abolition of the exemption from the production levy for the chemical industry

  • National aids for Southern Italy, for Spain with regard to sugar cane and for the mainland production of Portugal can be maintained at the same level as in the year 2000/2001

  • Finland is authorised to introduce a national funded storage scheme restricted to the carry over of C-sugar, given its specific climatic conditions.

Reform of the sheepmeat sector

Fischler presented the Commission proposal. « The overall objective of the reform is to provide a firm foundation upon which producers could develop their enterprises. Although the existing deficiency payment system appears to be an effective cushion, protecting producers from falls in price, it can have a perverse effect by sheltering producers from the effects of the market. Producers cannot benefit from high prices because this results in a lower premium. », he said. « The most logical way forward is to replace the variable, deficiency payment premium by a fixed premium of 21 € for the main premium and 7 € for the supplement to farmers in less favoured areas. The amount of 21 € represents an increase compared to the average of premium levels during recent years. » The modification of the sheep and goatmeat regime should be applicable from 1 January 2002.

According to Fischler, a fixed ewe premium would have clear advantages:

  • It is stable and predictable;

  • It allows producers to respond to the market;

  • It avoids the need for burdensome price reporting procedures and complex calculations;

  • It is more adapted to the objectives of WTO as it would not be price related;

  • It is not influenced by prices in other Member States;

  • It is simple to understand and administer;

  • It achieves budgetary stability.

It is also proposed to maintain a lower level of premium for goats and for producers who sell sheep's milk or products made from sheep's milk. The reason for this is straightforward: such producers have an additional source of revenue from the dairy side of the enterprise, which sometimes represents a very significant proportion of their income.

Following a first round of discussion the Council referred the proposal to the SCA for further examination.

Reform of the olive oil regime

The Council had a discussion on the Commission proposal to extend the existing aid scheme for the olive oil sector by two marketing years. The Commission opted for a prolongation of a production-based aid regime because some fundamental pre-conditions for a reform have not yet been met by Member States. Proper control based on reliable figures on the production of olive oil and the number of olive trees must be ensured. This can only be obtained by the Geographic Information System (GIS), showing olive groves declared by producers on aerial photographs. Following a proposal from the Commission in 2002, the Council would decide on the shape of the market organisation from 1 November 2003. Any aid granted under the future scheme would be made conditional on the existence of a GIS. The proposal foresees a strategy to add value to and improve the quality of olive oil production a vital feature in the olive-oil market.

The Council centred its discussion on the issue of the length of the prolongations of the current arrangements and related matters.

Responding to claims from certain producer countries, Fischler pointed out that he did not see any reason to prolong the existing production based regime for more than two years. « It would be odd to have all the necessary informations and control tools at hand in 2003, but not to make use of it ». Speaking about the current market situation, he rejected any storage measures. « The prices are low because production has been increasing more quickly than production. Storage measures would merely postpone the problems, not solve them. »

The matter was referred back to the SCA in order to prepare a decision in June.

Support for the nut sector

Responding to the request of Spain, Italy, Greece and Portugal for an extension of the specific aid for the nut sector, Fischler underlined that € 750 million of EU-support had been made available during the last ten years to improve production and marketing. The programmes which expired in 2000 were prolonged for one year triggering EU-expenditure of 24 millions. Further € 250 million are still to be paid out under on-going programmes. He stressed that support was also available for producer organisations under the operational fund scheme and via rural development plans. Fischler acknowledged that while especially the extensive nut producers did improve their cultivation methods and quality, they still have not achieved the necessary efficiency in order to be competitive. « I am aware of social problems. Precisely for that reason it would be wiser to go for alternative programmes within the rural development plans. But the Commission is still in the process of looking into the question how to address this problem. »

The Council took note of the comments made.

State aids wine distillation

Portugal explained that its request is intended to compensate the price difference between the crisis distillation and the voluntary distillation. The Commission made it clear that without the purpose of restructuring the sector this kind of aid cannot be looked upon favourably. However, the Council unanimously agreed to authorise the state-aid.

Commissioner Byrne's Agenda points

Public debate on ethical aspects of animal husbandry

All ministers expressed their support for stronger measures on animal welfare. Mr Byrne explained that the Commission - while having a subsidiary role only in relation to animal welfare - was working actively on improving the situation. Draft legislation on improvement of pig rearing and on upgrading animal transport lorries is already with the Council and the European Parliament. A report of the Scientific Committee on veterinary health expected in October will form the basis for further proposals for animal transport improvements. Mr Byrne underlined however that Member States continue to have the most important role to play in enforcing the existing legislation to protect animals and that unfortunately there was a need for substantial improvement in their performance on implementation.

Mr Byrne´s speech is available on request.

Report on the situation of BSE in Europe

Mr Byrne updated ministers of the latest figures on BSE-testing results and also explained the age profile of BSE-cases.

The principal trends emerging from the tests carried out up to the end of March can be summarised as follows:

  • 75 cases of BSE were found as a result of more than 1, 75 million tests carried out on healthy cattle at slaughter in the EU;

  • 84 cases of BSE were also found as a result of the 150,000 tests carried out on cattle dead-on-farm, subject to casualty slaughter or which were found sick at ante-mortem inspection;

  • 3 cases were found as a result of the examination of the 20,800 cattle examined in the framework of BSE eradication;

  • Finally, 185 cases of BSE were found as a result of the examination of 1601 clinical suspect animals. 

Mr Byrne also highlighted that the youngest case of BSE found in over 1.75 million tests on healthy cattle aged over 30 months was in an animal aged 42 months. This is 12 months above the current lower age limit of testing of 30 months. In turn, this suggests that it is not necessary to reduce the current testing age of 30 months for healthy bovines at Community level as favoured by a few Member States. Mr Byrne will however propose to reduce the obligatory testing age of 30 months for a specific target group entering the food chain (at risk or sick animals) to 24 months. This will serve as an early warning system of any potential problem in relation to BSE in younger cattle.

A large majority of Member States supported the Commission's approach and insisted that any measures should only be on harmonised Community-wide basis. .

Mr Byrne´s speech is available on request.

Situation of Foot and Mouth disease in Europe

The Commission, the UK and the Netherlands gave an update of the situation concerning FMD. The Council welcomed the positive developments and appreciated the efforts made to eradicate the disease while acknowledging the need of having a proper evaluation on the lessons to learn from the outbreak.

Mr Byrne´s speech is available on request.

Progress report on the food hygiene proposal

The legislative work on the recast of directives regulating hygiene for food is well under way. Mr Byrne informed the Council about the state of play.

Marketing of compound feedingstuffs

On request of the German delegation, the Council discussed the draft proposal to label compound feedingstuffs to ensure that stock farmers are informed about the composition of compound feedingstuffs, imposing a compulsory declaration of detailed quantitative and qualitative information. European Parliament and Council are divided on the question how detailed the information on the label should be.

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