WRITTEN QUESTION E-2585/00

by Willi Görlach (PSE), Heinz Kindermann (PSE), Albert Maat (PPE-DE), Xaver Mayer (PPE-DE), Agnes Schierhuber (PPE-DE), Joseph Daul (PPE-DE) and Niels Busk (ELDR) to the Commission

(1 August 2000)

Subject: Refunds in connection with the export of pure-bred cattle to third countries

After earlier cuts in December 1999 and March 2000, on 13 May 2000 EU refunds for beef and veal, and thus also for breeding cattle, were reduced once again. In the case of breeding cattle, the refunds have been reduced by 5 %, 5 % and 20 % respectively, i.e. in figures from 63 per 100 kg live weight (LW) in 1999 to 46 per 100 kg LW since May of this year.

The reasons put forward for these reductions were the relatively high dollar exchange rate vis-à-vis the euro and relatively high beef and veal prices on the European internal market. However, transactions involving the export of breeding cattle from the EU to Central and Eastern Europe, north Africa and the Middle East are generally carried out in euros. As a result, a high dollar exchange rate is in no way conducive to the export of breeding cattle.

The relatively high beef and veal prices on the internal market are in fact disadvantageous for exports of breeding cattle. Dairy farmers in the EU are encouraged to use calves for the production of beef and veal, rather than rearing them as heifers for export. Dairy farmers may even decide to have most cows in their herds inseminated with sperm from beef cattle.

1. Does the Commission acknowledge the significance of the export of breeding cattle from the EU in maintaining a balance on the European beef and veal market and in improving dairy cattle stocks in the importing countries in Central and Eastern Europe, north Africa and the Middle East?

2. Can the Commission outline the impact of the reduction in refunds on exports of breeding cattle and on producers of breeding cattle, taking into account the recently introduced slaughter premiums which are also granted when breeding cattle are exported to third countries?

3. To what extent is the Commission prepared to take account of the specific situation of producers of breeding cattle in the EU when considering the issue of export refunds?

4. Is it conceivable that refunds for the export of breeding cattle might be returned substantially to their 1999 level ( 63 per 100 kg LW), minus the slaughter premium introduced in 2000 and the agreed increase in that premium?

Answer given by Mr Fischler on behalf of the Commission

(16 October 2000)

Rearing breeding animals is an important activity in the bovine sector in its own right but, certain specific features apart, is closely tied to the prevailing general economic situation of the beef and milk industries. The production decisions taken by breeding cattle rearers are therefore greatly influenced by market prospects in these industries and as an activity linked to them it is also affected by decisions and measures adopted for them. Rearers of breeding cattle receive the Community premiums (including the suckler cow and slaughter premiums) and are subject to the impact of decisions on the export refund.

1. Exports of breeding cattle are helping develop the structure of milk production in many European countries, in North Africa and in the Middle East. The Commission has accordingly several times organised or participated in programmes for delivering animals to certain countries. The primary contribution of these exports is to sustain quality development in the agriculture of the countries of destination. Their effect on the beef market situation in the Community is not of identical importance. International trade in breeding cattle depends mainly on factors relating to milk production in the purchasing countries and is not directly linked to the situation in the Community.

2. This year constitutes for the bovine sector the first stage in execution of the decisions, adopted under Agenda 2000, to reduce prices substantially but offset this by granting premiums to producers. Moreover the market situation this year has been marked by very high producer prices as a result of lower production and improved consumption, the result being a fall in quantities available for exportation. The cumulative effects of these factors has forced the Commission to act several times already on the level of the export refund.

3. It must however be noted that when these decisions on the level of the refund were taken the specific position of breeding cattle exporters was taken into account. Thus when the successive reductions in refund rates for breeding cattle were made the reduction was much smaller than that decided on for slaughter cattle. The latest modification of the refunds (2 September) did not affect breeding animals.

The Commission will continue to monitor the export refund question with similar care.

It remains of the opinion that particularly for breeding cattle price levels are not the only determinant of whether or not trade occurs. Other factors (third country buying policies, availability of funds, genetic and other qualities of the animals etc.) intervene.

4. A decision to return the refund to its 1999 level (minus the slaughter premium) could not be defended as compatible with the reform adopted.