WRITTEN QUESTION E-2802/96 by Angela Billingham (PSE) to the Commission (25 October 1996)

Subject: EC farming subsidies

What is the rate of subsidy British farmers receive, what cost is that per capita and how quickly do they receive their monies? This is particularly important in view of what is happening with our beef/dairy farmers and the BSE epidemic. I would appreciate having the EC's guidelines on compensation.

Answer given by Mr Fischler on behalf of the Commission (20 November 1996)

Most of the direct payments to agricultural producers which are financed under the European agricultural guidance and guarantee fund (EAGGF) - guarantee section of the budget, involve the granting of an annual premium per head of cattle or sheep or an aid per hectare of arable land. The amount of the total payments to an individual producer therefore depends upon the number of animals and the number of hectares of arable land (including set-aside) held by that producer which are eligible for aid. The amounts of aid payable per animal or per hectare, and the conditions and time limits for payment by the authorities in the Member States vary according to the nature of the agricultural production involved and are specified in the Community legislation setting up the common market organisations of the sectors concerned.

In the specific case of cattle rearers, and in addition to the traditional measures such as intervention buying and export restitutions ((The possibilities for exports from the United Kindom of bovine animals and of beef and beef products are currently constrained by the provisions of Commission Decision 96/239/EC of 27.3.1996 on emergency measures to protect against bovine spongiform encephalopathy (OJ L 78, 28.3.1996), as amended by Decision 96/362/EC of 11.6.1996 (OJ L 139, 12.6.1996). )) which help to support the market price for beef, the common market organisation for beef and veal provides for a number of direct payments to be made to beef producers. Thus, within certain quantitative limits and subject to conditions regarding stocking densities, beef producers throughout the Community receive annual premiums payable on their requests with respect to the eligible suckler cows and male bovine animals present on their holdings. These premiums are fully financed by the Community budget.

For suckler cows, the amount of the premium is 144.90 ECU per animal. Member States are also authorised to grant an additional national premium on suckler cows of up to 30.19 ECU per animal. The suckler cow premium is not payable to producers who also deliver milk and whose milk reference quantity exceeds 120 000 kilogrammes. For male bovine animals, the amount of the premium is 108.70 ECU per animal and may be paid twice in the life of the animal, once when it has reached the age of 10 months and again after it has reached the age of 22 months. The definitive amounts of the suckler cow and male animal premiums are payable as soon as the required inspections have been carried out and no later than 30 June following the calendar year during which the producer has submitted his request. However, provided the necessary administrative controls and checks have been completed, an advance on the premium is payable. Normally, the amount of the advance is 60% of the full premium, payable as from 1 November of the year during which the premium has been requested. Exceptionally for 1996 requests, the amount of the advance has been fixed at up to 80%, payable as from 1 October 1996. Producers who receive the suckler cow premium or the male animal premium may also qualify for an additional Community financed 'extensification' premium of 36.23 ECU per animal if the stocking density for their holdings is less than 1.4 livestock units per hectare.

The premium systems described above represent permanent annual features of the common market organisation for beef and veal. However, the exceptional circumstances of the beef market in 1996 have led to the introduction of a number of additional measures. In July 1996, and in view of the consequences of the bovine spongiform encephalopathy (BSE) crisis for producer incomes, the Council decided to make additional Community financed payments to beef producers in 1996 to help compensate for their income losses. A total amount of 850 MECU was foreseen for these additional payments, of which the United Kingdom share is about 130 MECU. In order to qualify for financing, the payment of the compensation had to be made no later than 15 October 1996. Furthermore, and if necessary, Member States were permitted to complement these Community financed payments by a nationally-financed compensation of up to an equivalent amount.

In view of the particular circumstances in the United Kingdom following the onset of the BSE crisis, two other measures have also been introduced in that Member State. Firstly, a scheme provides for the slaughter and subsequent complete destruction of all cattle aged more than thirty months. After the animals have been slaughtered, the producer is paid a compensation based on the market value of the animal, currently fixed at 0.9 ECU per kilogramme liveweight. Once the animal has been destroyed, the Community budget reimburses an amount of 353 ECU per animal, corresponding to 70% of the compensation. Secondly, the United Kingdom has decided to implement the Community processing scheme for calves. Under this scheme, which is voluntary for producers, a premium of 120.8 ECU per animal, fully financed by the Community budget, is payable for male dairy-breed calves of up to 20 days old. The premium is payable within the two months following the month of slaughter.