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Select Committee on European Legislation First
Report
SUPPLEMENTARY AIDS TO THE BEEF SECTOR |
21.1 We first considered the Commission's proposal to make supplementary payments in the beef sector on 5 June, and examined its further proposals for aid to the beef sector on 16 October[44]. We asked to be kept informed of the overall cost to the EU Budget, and the effect on the UK rebate of the various supplementary measures which have been put forward. In a letter of 14 October, the Minister of State at the Ministry of Agriculture, Fisheries and Food (Mr Baldry) provides this information.
Budgetary consequences of supplementary measures put forward in the context of BSE
21.2 In a letter of 16 July, the Minister of State told us that, at the June Agriculture Council "the main point to emerge was an increase in the supplement rate from 25 ECU to 27 ECU (£23.13) for Suckler Cow Premium and from 21 ECU to 23 ECU (£19.70) for Beef Special Premium." The funds available for Member States to use on national schemes was increased from 112.1 million ECU to 261 million ECU with an increase in the UK's share from 16.3 million ECU to 24 million ECU (£29 million) and Member States were given the option of matching this funding pound for pound from their own resources. The Minister of State pointed out that the total EU cost of 850 million ECU (£690 million) is being met from within the 1996 CAP budget appropriations.
21.3 In view of our concern that distortion should be avoided in the beef market in the Community, we asked for further details of the overall cost of the measures and of the effect on the UK rebate. This is set out below. The Minister of State has added the information that the European Commission's current CAP budget proposal contains provisions of £1,888 million in 1996 and £1,406 million in 1997 for measures so far agreed to deal with BSE, including additional beef market support measures. The Council has also agreed to divert up to £400 million likely to be underspent in other sectors in 1996 to finance advanced payments of beef premiums. About £285 million of the 1996 amount is expected to be spent in the United Kingdom, excluding the share of additional intervention purchases of which a breakdown is not available. In 1997 about £296 million is expected to be spent in the United Kingdom, plus a share of additional intervention purchases.
21.4 The national aid measures previously agreed will be distributed to beef producers through the 1996 Beef Marketing Payment Scheme. In the UK nearly 27,500 eligible claims had been received up to the period when applications closed on 23 August. Payments are expected to be made in respect of some 435,000 animals at a flat rate of £66.76 per animal.
Conclusion
21.5 We reiterate our concern that over-payments should be avoided and that national aids should not distort competition or over- compensate certain producers. We are also concerned at the estimated cost to the Community budget in 1996 and the projected cost in 1997, particularly since many of the measures appear to be have been taken piecemeal. However, we judge that the further information provided does not justify recommending a debate.
The table includes the following measures:
(b) the calf slaughter premium; (c) the package of aid for the renderers and the abattoir and cutting industries announced on 3 April and 16 April respectively; (d) the feed recall scheme; and (e) additional running costs for the Agriculture Departments. The figures take account of both the UK's contribution to additional Community spending and the effect of additional receipts on the UK abatement. The figures do not include either the costs of the accelerated cattle slaughter programme, or the costs of increase beef intervention and other measures in the beef package proposals for which precise estimates are not yet available.
43. See HC 51-xxi (1995-96), paragraph 13 (5 June 1996). Back 44. (17459) 9551/96; see HC 51-xxix (1995-96), paragraph 32 (16 October 1996). Back |
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| © Parliamentary copyright 1996 | Prepared 12th November 1996 |