WRITTEN QUESTION E-3476/02

by Jan Mulder (ELDR) to the Commission

(6 December 2002)

Subject: European framework regulation for BSE costs consumer levy

Since introduction of the compulsory BSE test for groups of cattle, various Member States have been giving support to producers to offset the costs associated with such tests. This support takes the form of direct subsidies or a levy on the (end) product.

In its answer to Written Question P-3134/01(1) the Commission says that after it has assessed the information on support measures for the cost of BSE which it obtained in 2001, it will decide what steps should be taken for further harmonisation.

1. Has the Commission now carried out such an assessment, and what conclusions has it produced?

2. Has the Commission thus reached the conclusion that there is no longer a crisis situation, partly because the price of beef has returned to its old level, and because the internal market ought once more to operate without distortion?

3. Does the Commission agree that, in view of the substantial scale of BSE testing costs in relation to the animal's value, and hence the enormous impact of the support measures in distorting competition, a European regulation should be drafted to counteract that distortion?

4. Does the Commission agree that a framework regulation giving Member States the opportunity to introduce a levy on the end product would be a suitable instrument for dealing with the distortion of competition caused by the cost of compulsory BSE testing on the European market?

(1) OJ C 115 E, 16.5.2002, p. 230.

Answer given by Mr Fischler on behalf of the Commission

(23 January 2003)

The Commission has concluded its assessment of the impact of State aid granted towards the cost of bovine spongiform encephalopathy (BSE) tests. It has found that there is a risk of distortion of competition arising from different levels of State aid granted, at least as far as slaughter cattle are concerned. However, the Commission has also taken note of the purpose of the tests and the particular concern for the protection of human health. Therefore, a total prohibition of aid does not seem warranted. As a consequence, the Commission has adopted Community guidelines for State aid concerning transmissible spongiform encephalopathy (TSE) tests which set out that as of 1 January 2003(1), the total amount of public support (including Community support) for BSE tests has to be limited to EUR 40 as far as testing of bovine animals slaughtered for human consumption is concerned. This amount may be reviewed in the future, as test costs fall.

For TSE tests on other animals, Member States may continue to grant aid of up to 100 % of costs.

A framework regulation giving Member States the opportunity to introduce a levy on the end product would not seem to reduce distortions of competition. Such a voluntary scheme, which leaves it to Member States to introduce a levy, would not lead to harmonisation.

For the time being, the Commission does not see a need for further regulatory action. The approach chosen with the new State aid guidelines seems appropriate to cope with the distortions of competition found in its examination. However, the Commission will follow market developments also in the future.

Finally, the new State aid guidelines are adopted against the background of an overall market stabilisation with satisfactory price levels observed on the Community beef market.

(1) OJ C 324, 24.12.2002.