Opinion of the Economic and Social Committee on the "Proposal for a Council Regulation amending Regulation (EC) No 1254/1999 on the common organisation of the market in beef and veal"

(2001/C 193/10)

On 26 February 2001 the Council decided to consult the Economic and Social Committee, under Article 37 of the Treaty establishing the European Community, on the above-mentioned proposal.

On 27 February 2001 the bureau of the Economic and Social Committee asked the Section for Agriculture, Rural Development and the Environment to prepare the Committee's work on the subject.

At its 381st plenary session on 25 and 26 April 2001 (meeting of 25 April) the Economic and Social Committee, in view of the tight deadline, appointed Mr Kienle as rapporteur-general and adopted the following opinion by 76 votes to two with seven abstentions.

1. Background

1.1. The emergence of new cases of bovine spongiform encephalopathy (BSE) has plunged consumer confidence in beef and veal and the whole of the cattle-farming sector into a crisis which threatens the very existence of this sector.

1.2. The comprehensive precautionary measures which have been taken - such as the ban on the use of meat-and-bone-meals, the introduction of BSE tests and the removal of material posing a specific risk - are prerequisites for re-establishing consumer confidence. The European Commissioner responsible for public health, Mr Byrne, speaking at the BSE Hearing organised by the Economic and Social Committee on 9 March 2001, underlined the fact that in his view there were no conceivable additional measures which could provide still more effective protection.

1.3. Consumption of beef and veal in many EU Member States has fallen very sharply and major export markets have been lost. As a result, producer prices have collapsed. The outbreak and rampant spread of foot and mouth disease has been a further heavy blow for both the internal market and external trade.

1.4. In many regions - including, in many cases, upland areas and other areas suffering from natural disadvantages - cattle farming is extremely important both economically and as a determining characteristic of the landscape. There is a widespread fear of losing their livelihood and mood of resignation amongst farmers hit by the crisis facing the beef and veal market.

2. Gist of the Commission's proposals

2.1. The proposals which had been presented for amending Regulation (EC) No 1254/1999 on the common organisation of the market in beef and veal are an key part of a "seven-point plan" put forward by the European Commissioner for Agriculture, Mr Fischler, on 13 February 2001 with a view to overcoming the crisis affecting the beef and veal sector.

2.2. A separate Committee opinion is being drawn up on the Proposal for a Council Regulation amending Regulation (EC) No 1251/1999 under which organic farms are in the future to be given the possibility to grow particular kinds of fodder legumes on set-aside ground.

2.3. Neither the ESC nor the European Parliament has, however, been consulted on the Commission's proposal to adopt a further special purchase scheme for cattle aged over 30 months in all Member States with a view to easing the pressure on the market in the short term. The decision on this scheme was taken by the European Commission's Management Committee for Beef and Veal.

2.4. The Commission proposals under review address the following issues:

- the promotion of extensive production through the lowering of the stocking density;

- the promotion of extensification by setting a mandatory ceiling of 90 animals eligible for payment of a premium per producer;

- introduction of individual premium rights for producers in respect of male bovine animals;

- amendments to the provisions governing the suckler cow premium;

- non-application of the ceiling in respect of the quantities to be bought in.

3. General comments

3.1. The ESC agrees with the Commission on the urgent need for emergency measures to tackle the upheavals on the beef and veal market brought about by the BSE crisis. The ESC supports appropriate measures designed to bring an end to market disruptions in the short term and to restore the markets to balance in the medium term. National aid schemes must not trigger new distortions in competition or even trends towards a "renationalsation" of the Common Agricultural Policy.

3.2. Even though the ESC has not been directly consulted on an additional special purchase scheme, as proposed by the Commissioner for Agriculture in his seven-point plan, the Committee nonetheless welcomes this proposal as it may make a decisive contribution towards the essential need to ease the pressure on the market. Given many people's ethical qualms about destroying food, the Committee feels it is right that Member States be given scope - at their own expense - to make BSE-tested and labelled meat from healthy cattle aged over 30 months available for humanitarian deliveries, or to keep it in store.

3.3. The ESC points out that the agricultural reforms which have been carried out have already resulted in moves towards a more market-oriented approach and established incentives for greater extensification in the beef and veal sector. Attention is also drawn to the fact that last year, up to the outbreak of the current BSE crisis, a balanced market, without intervention and providing adequate returns for producers, had been achieved. The Agenda 2000 decisions on the common organisation of the market in beef and veal should therefore, as a matter of principle, not now be brought into question, especially as Agenda 2000 was due to cover a period of six years and has only been in force for one year. Mid-term reviews are also planned for 2002 and 2003 which will also address the decisions on the organisation of the market in beef and veal. The ESC is concerned that a mix of short, medium and long-term measures could hamper rapid resolution of the present crisis. This point was also demonstrated by the initial discussions on the Commission's proposals held by the Special Committee on Agriculture and the Agriculture Council which were marked by sharp disagreement.

3.4. In the ESC's view the BSE crisis poses a threat to the existence of both small and large enterprises irrespective of the farming method employed. Steps should therefore be taken to ensure that the proposals do not result in further loss of income for particular farms and regions and that the Community's efforts are not undermined by increased exports which may be subject to lower health standards and checks.

3.5. The ESC is critical of the fact that the proposals contain no incentives to reduce the supply of beef and veal by lowering carcass weights. This could be achieved, for example, by linking the payment of premiums to ceilings in respect of carcass weight or the age of stock; this practice is being followed quite successfully in the case of slaughter premiums for calves. A further possible measure would be to increase aid for calf-fattening in order to further limit the number of heavy adult animals being fattened.

3.6. Against the background of the dramatic upheavals on the beef and veal markets - which have taken on a new dimension as a result of the outbreak of the foot and mouth disease - it is, in the ESC's view, essential to seek to achieve a harmonised approach throughout the EU over the use of public funds to defray costs. In the current market crisis, producers and processors alone cannot be burdened with the considerable additional costs of comprehensive BSE safeguards. It is also essential to avoid new distortions in competition. In view of the seriousness of the crisis, the ESC expects that the EU will also have to make available special funding to relieve or remove hardship.

3.7. The ESC requests the Commission to back up the supply-side measures by additional and more pro-active demand-side measures. The wide-ranging consumer protection measures should go hand in hand with the substantial stepping-up of an information and communication campaign. Steps should also be taken to highlight both the importance of beef and veal as valuable food sources and the significance of beef and veal production to both rural areas and the food industry. In particular, resources under Regulation (EC) No 2826/2000 on promotion actions for agricultural products should also be deployed for a Community campaign of this kind.

4. Special comments

4.1. The Committee recognises that the proposals to further lower the stocking density and establish the 90-head limit would hit certain regions and farms very hard, with no expectation of any short-term easing of market pressure. Hence, this discussion should be comprehensively pursued in conjunction with the mid-term reviews.

4.2. The ESC notes that the introduction of reference quantities for individual producers in respect of the special premium for male bovine animals would lead to a radical change in market organisation. While short-term market impact is doubtful, this adjustment would clearly involve a considerable and permanent increase in red tape, which does not chime with the desired administrative simplification of the CAP which has also been advocated by the Commission. It would, moreover, also make it more difficult for farmers to adapt to future market developments.

4.3. The ESC would point out that the proposed amendment in respect of the suckler-cow premium must not one-sidedly burden small agricultural holdings.

4.4. The Committee would warn against any return to permanent intervention. However, in the light of the current extreme market disruptions, the ESC considers that the proposal that the intervention ceiling of 350000 t set out in Agenda 2000 be temporarily repealed is the right course of action. The provisions governing intervention, particularly those in respect of carcass weights, should also be reconsidered.

Brussels, 25 April 2001.

The President

of the Economic and Social Committee

Göke Frerichs