WRITTEN QUESTION E-0208/99

by Armelle Guinebertière (UPE) to the Commission

(12 February 1999)

Subject: Aid for sheep-breeding

The level of income of sheep-breeders is among the lowest in the farming sector. Given that sheepmeat prices fell by 50 % between 1997 and 1998 a decision must be taken to support this sector.

In the first place it seems that the budgetary stabiliser mechanism set up in 1988 for calculating Community premiums for sheep serves no purpose. The marked increase in sheep stocks in Europe has stopped since the introduction of entitlements to premiums following the 1992 reform. However, the rural society premium remains as important as ever.

Secondly, there is a risk of an imbalance occurring: the introduction of the extensification premium provided for under the COM for beef means that in many regions mixed breeders (both sheep and cattle) may be drawn towards cattle production. An equivalent measure as part of the draft regulation on rural development consisting of introducing an extensification premium for the sheep sector would be welcome.

Does the Commission not believe that solutions - which would, of course, be linked to a system based on Community compensation - are needed, in order to reduce and avert the problems facing this sector?

Answer given by Mr Fischler on behalf of the Commission

(12 March 1999)

It is true that 1998 has been a very difficult year for many meat sectors and sheep is no exception. However, prices decreased relatively less than in other meat sectors and were fully compensated by the ewe premium, which increased by 50,3 % when compared to one year earlier. Lamb prices decreased by 13,3 % in 1998 when compared to the average for the previous year.

Whilst sheep producers may have incomes which are lower than many other agricultural sectors, the sheepmeat sector enjoys a relatively high level of support. Its share of expenditure in the European agriculture guidance and guarantee fund (EAGGF) Guarantee budget (7-8 %) is more than four times its contribution to final agricultural production.

The Commission does not intend to propose that the basic price be increased by removing the stabilizer. The flat rate of 7 %, which was introduced at the time of the 1992 reform, was compensated by the introduction of the "rural world" premium for producers in less-favoured areas. As they are linked in this way the suppression of the stabilizer would put into question the payment of the "rural world" premium. Furthermore, removal of the stabilizer would increase budgetary expenditure resulting in spending on the 1998 ewe premium being increased by about 25 % (or 365 million euro) for example.

Similarly, there is no intention to propose an extensification premium in the sheep sector. It is true that the number of ewes declared for the premium is taken into account in the calculation of the stocking density in the beef sector in order to avoid any discrimination between mixed sheep and beef producers and beef only producers. However, to introduce a similar system for sheep would prejudice producers in certain regions of the Community who have no land as such which they could declare in an area aid application to support a claim for an extensification premium. Furthermore, an extensification premium has been operational in the beef sector since 1993 without having an effect on the sheep sector.