EC MINISTERS CONSIDER BIG AGRICULTURE PRICE CUTS
European Community (EC) agriculture
ministers meet later today to consider a package of deep cuts
in prices and subsidies after a week marked by strong protests
by European farmers, Community officials said.
    The common target for the farmers' wrath is the EC's
Brussels Commission, which for the fourth year running has
called for radical changes in the price support system.
    EC Agriculture Commissioner Frans Andriessen says huge food
surpluses, which have alienated international trade partners
and pushed the Community to the edge of bankruptcy, demand such
action.
    With Community warehouses stocked with some 16 mln tonnes
of unwanted cereals, over one mln tonnes of butter and huge
stocks of wine and olive oil, Andriessen says bluntly the days
of open-ended price guarantees must end.
    EC agriculture ministers try to fix the guaranteed prices
paid to Community farmers before an April 1 deadline for the
new marketing year, an increasingly difficult task as EC
members cut funds and demand greater budget discipline.
    Andriessen has proposed a freeze for most prices, coupled
with reductions in other support mechanisms, which could lead
to price cuts of as much as eight pct for some products.
    A producer's right to sell into EC warehouses at a fixed
guaranteed price when he finds no real market outlet is to be
scaled back so it applies only in exceptional cases.
    The latest proposals are designed to keep expenditure on
agriculture virtually stable. EC farm policies now swallow
two-thirds of an annual budget of about 36 billion European
currency units (Ecu) and are mainly responsible for an expected
shortfall this year of about five billion Ecus.
    The most contentious aspects of the package are a new oils
and fats tax and a change in the "green" exchange rate system,
which translates EC farm prices into national currencies.
    The tax, of up to 330 Ecus per tonne, would be levied on
imported and domestically produced oilseeds, but could trigger
a fresh trade dispute with the United States, which provides
the EC with the bulk of its soybeans.
    It would increase the cost of margarines and low-fat
products in an attempt to increase both olive oil and butter
consumption.
    West Germany has flatly rejected green rate changes, which
would cause a fall in prices for producers as countries with
weak and strong currencies were brought more into line.
 REUTER
