EU ministers drop plan to cut cereal growers aid by £1.1bn

EU Agriculture Ministers yesterday removed proposed cuts of £1.1 billion in aid to cereal growers before approving the annual farm price package. And the Minister for Agriculture, Mr Yates, got a promise from the Commission to look urgently at measures to provide a floor price for Irish beef ahead of this autumn's peak slaughtering period.

Mr Yates said he was "very pleased" with the outcome of the meeting, although ministers had only delayed the return to the agenda of cereal aid cuts in a reform of the whole sector.

The Commission had sought the cuts partly to plug a gap in the budget caused by the BSE crisis but buoyancy in the markets meant that the gap disappeared with the Commissioner, Mr Franz Fischler's leverage.

However, reports from Britain and the Commission, suggesting that cereal growers have received over £6 billion in over compensation for price cuts that did not occur over the last four years, will ensure that the issue will not go away.

Mr Yates said he did get agreement that if penalties were applied to countries for exceeding the base area, memberstates might apply such penalties on an individual producer basis.

The setaside rate for the coming year will be unchanged at 5 per cent, as will the derogation allowing cereals to enter intervention at above a 15 per cent moisture rate.

Overall, the price package represents a rollover of current prices, as it has done since the MacSharry CAP reforms set out to bring prices closer into line with those on world markets.

Mr Yates added that he was confident that the Commission's agreement to report before the end of the year on the functioning of ewe premiums "will lead to proposals which will more effectively support the incomes of sheep farmers".