WRITTEN QUESTION P-4148/97 by Sirkka-Liisa Anttila (ELDR) to the Commission (5 January 1998)

Subject: Grass subsidy to compensate for the large price differential between cereal fodder and grass fodder (forage)

The EU's reform of the CAP made the use of grass fodder more expensive than cereal fodder, as a result of the reduction in the cereal price. If the Agenda 2000 proposals are implemented in the form proposed by the Commission the price differential between grass and cereals will get even worse, particularly in the European Union's mountainous and northern regions. The production of grass fodder is rendered less profitable by growing conditions, as a result of which cereal fodder yields per unit in the best areas of Central Europe are much higher than forage yields per unit in northern and mountainous areas. Silage based on grass is the typical fodder for cows. If it is not possible to improve the profitability and competitiveness of forage in relation to cereals, this will lead to a considerable competitive disadvantage for cattle farms which are already in difficulties for other reasons. The elimination this competitive disadvantage demands additional subsidies. It calls for a subsidy for forage growing at a level comparable to the CAP subsidy payable for cereal fodder.

A reduction in the level of forage growing would increase nitrogen levels in water courses and total phosphorus levels, as well as leading to more erosion. The risk of eutrophication in lakes and rivers in areas with a high forage production would increase considerably. Solutions are sought from the Commission to the problem of unprofitability for northern crop growers resulting from Agenda 2000. The EU's grass production needs additional support so that we can preserve the competitiveness on the common market of milk production in northern and mountainous areas. Grass production needs additional support comparable to the CAP subsidy.

What measures does the Commission propose to take to secure the profitability and competitiveness on the common market of forage growing in northern and mountainous regions? Is the Commission prepared to set up a working party of its own to clarify this issue?

Answer given by Mr Fischler on behalf of the Commission (3 February 1998)

Many of the issues mentioned by the Honourable Member are related to the intensity of livestock farming and land use. These questions are addressed in the Commission's common agricultural policy (CAP) orientations contained in the Agenda 2000 document ((COM(97) 2000 final. )) of July 1997. In this document, various measures are proposed that promote more extensive farming which would include grassland. In the beef sector, respecting the minimum stocking density factor will be even more important as the level of the beef premia increases. It will even induce some producers to become more extensive. The effectiveness of the different incentives to extensify production, in particular the beef sector 'extensification scheme' will be strengthened and improved. The support scheme regarding less favoured areas (LFAs) will gradually be transformed into a basic instrument to maintain and promote low-input farming systems. Targeted agri-environmental measures (Regulation (EEC) No 2078/92 of 30 June 1992 on agricultural production methods compatible with the requirements of the protection of the environment and the maintenance of the contryside ((OJ L 215, 30.7.1992. )) will be reinforced through increased budgetary resources and, where necessary, higher co-financing rates. Extensification is a central aim of these measures.

Conversely, the milk yield of Finnish cows is higher than the Community average, implying a greater reliance on concentrate feed. As a consequence, Finnish farmers could be expected to benefit to a greater extent from a feed price fall.

A high reliance on grassland but on the other hand comparatively intensive production systems shows the issue is not straightforward. Since publication of the CAP 2000 policy orientations, the Commission has visited each Member State and listened to the points of view of governments, industry and other non government organisations. The Commission is also working to understand these issues better and is sure this process will continue after the formal proposals are published.

These formal proposals will shortly be proposed by the Commission and are not yet finalised. However, they will reflect the Commission's desire that livestock farming support should be more flexible, allowing Member States better to take into account the type of problems raised by the Honourable Member.