THE EU Farm Commissioner has warned of huge "beef mountains" and bankruptcy among farmers unless "radical and immediate measures" are taken to rebalance the European beef market after the BSE crisis.
Mr Franz Fischler said beef intervention stocks could rise to 600,000 tonnes by the end of 1996. This represents a catastrophic reversal for the Commission, which had succeeded in doing away with intervention altogether for more than two years prior to the BSE crisis. Since then it has approved 180,000 tonnes of storage. At the peak of intervention, in March 1993, some 1.12 billion tonnes were being held.
The Commissioner added that the Commission no longer had the option of selling on meat bought into storage on the world market, as the GATT agreement resulted in strict limits on subsidised EU exports. The new beef mountain was likely to depress the internal EU market "with obvious implications for beef producers income and the stability of the beef market in general."
He predicted the crisis will cost the EU £1,200 million this year, including £680 million in income support payments to farmers. Beef consumption was likely to fall by 11 per cent. And despite the huge level of intervention, prices were likely to fall further, resulting in bankruptcy for some farmers and meat processors.
Mr Fischler told the EU's Economic and Social Committee yesterday that the Commission would be bringing forward proposals soon to restore consumer confidence.
Against this "bleak" outlook the Commission was examining adjustments to the beef regime "which will be designed to reduce beef production as rapidly as possible, and therefore limit the duration of the economic crisis in the beef sector to as short duration as possible.
He warned "The economic viability of the beef sector in the future can only be guaranteed through a rebalancing of the market, which on the one hand involves the restoration of consumer confidence and on the other a reduction in production, which demands imaginative, pragmatic ideas constructive discussion and political courage."
The issue is likely to dominate the informal farm ministers' meeting in Killarney in September, the Minister for Agriculture, Mr Yates, said yesterday.
He rejected criticism from the farm organisations that he was too pessimistic about the future of the industry when he predicted losses of £1/2 billion because of the crisis. "Fortunately, these losses will be spread out over a number of years", he said.
One option being discussed by the Commission is the possible slaughter of millions of calves in the EU, but this "He rod option" will be opposed by animal welfare groups and veal producers.
Another option is the slaughter of older cows, but there is no demand for the meat from such animals and prime beef producers do not want this to happen.
The latest figures show that Ireland has 13,878 tonnes of beef in intervention Germany has most at 56,749 tonnes France 50,800 tonnes and the UK 20,430 tonnes.