EU farm ministers agree £400m "mad cow" compensation deal

EU farm ministers have agreed a £400 million compensation package for beef farmers, which is worth £45 million to Ireland and…

EU farm ministers have agreed a £400 million compensation package for beef farmers, which is worth £45 million to Ireland and £50 million to Britain.

The deal was brokered by the Minister for Agriculture after three days of talks. Last night, Mr Yates said that the result for Ireland was "an exceptional deal by any standards".

The package, to assist farmers affected by the BSE crisis, aims to reduce the European market by two million calves during 1997. Discussion on the longer term reform of the European beef market was deferred.

It was the second significant aid package voted through for farmers this year and will assist them at a most difficult time", Mr Yates said, referring to the £70 million compensation paid to Irish farmers in June. He welcomed the fact that the compensation would not mean cutting subsidies to cereal farmers.

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Irish farmers will be compensated to the tune of £30 million for income losses and many will also receive a share of £15 million in grants to support less intensive farming, with lower densities of cattle per acre under the EU's "extensification" scheme.

Some 66,000 small farmers, mostly in the west, will benefit from an average £230 each from improvements to the extensification scheme. And income compensation up to £30 a suckler cow will be paid to all farmers.

Crucial to the deal was agreement on dividing the income compensation money. Germany was unhappy at its share of the £700 million agreed in June for this year and they successfully demanded a new formula for the 1997 package.

Ireland, on the other hand, received about to per cent of the 1996 compensation and will get 7.5 per cent of the 1997 package. The money can be distributed at the discretion of the member state.

The Commission will fund the package by pushing back £1 billion in rape seed oil subsidies from October next year to December, the new financial year. However, this still requires European Parliament approval.

Under the compromise proposals on rebalancing the beef market the controversial "Herod" slaughter scheme for newborn calves is now simply an alternative to a German early marketing calf premium. But the member states are committed to reducing the number of calves by two million - otherwise the Commission will review the schemes.

Irish farming organisations complained that the payments did not go near matching losses. Mr John Donnelly, the president of the IFA, said £100 million had been lost.

The ceiling for intervention will be raised to 550,000 tonnes for this year, down from the 750,000 tonnes the Commission had earlier feared would be necessary and reflecting a somewhat stronger market than previously anticipated. The President of the ICMSA, Mr Frank Allen, said that the ministers had failed to address the real issues and were simply tinkering with relatively minor side issues.

Patrick Smyth

Patrick Smyth

Patrick Smyth is former Europe editor of The Irish Times