EC COMMISSION DEFENDS FARM PROGRAM
The European Community's (EC)
executive Commission defended attacks on major elements of its
ambitious program to rid the EC of its controversial farm
surpluses, after strong attacks from northern states.
    Britain and West Germany, backed by the Netherlands and
Denmark, opposed a proposed tax on edible oils and fats which
has already sparked strong protest from exporters to the EC led
by the U.S. and from EC consumer groups, diplomats said.
    But EC Agriculture Commissioner Frans Andriessen told
journalists he had warned ministers that failure to agree the
tax, proposed last month as part of the Commission's annual
farm price package, would leave a large hole in the group's
budget.
    He added that he hoped states had not yet made their mind
up for good. "I hope the debate is still open, if not there will
be a formidable hole in the budget," he said.
    The shortfall could reach two billion dollars in 1988 and
would be only slightly less this year, he said.
    Foreign ministers were taking a first look at the tax ahead
of farm ministers in a move described by diplomats as
unprecedented and welcomed by Andriessen as a sign ministers
recognised the importance of reforming the EC's farm policy.
    The proposed tax is designed to provide the EC with extra
cash to finance community oilseed crops at their current levels
and to brake a dramatic decrease in olive oil consumption by
making it more competitive with other oils.
    Andriessen noted the EC has over two mln olive oil
producers, mostly small farmers, who could be helped by the
tax.
    "What we are suggesting is reasonable, it should be better
understood not just outside the community but at home," he said.
    Britain, normally a keen advocate of radical changes in the
EC's costly farm subsidies system, warned the proposal to
impose the tax on both domestic and imported oils and fats
could seriously damage the EC's trade relations with other
countries.
    Britain also warned that the tax could hit developing
countries already receiving aid from the EC, they said.
    The Commission also defended proposals to dismantle
Monetary Compensatory Amounts (MCA) -- a system of cross border
subsidies and taxes to level out foreign exchange fluctuations
for farm exports -- against harsh West German criticism.
    In a letter this weekend from Chancellor Helmut Kohl to EC
executive Commission President, Jacques Delors, Kohl made clear
such a dismantling would mainly hit West German farmers.
    Diplomats said West Germany again repeated its criticism at
the talks here but Andriessen told journalists that Germany had
been alone in its opposition. The question was a key aspect of
the Commission's farm price proposals, he added.
   Ministers also agreed a 3.5 billion dlrs scheme to rid the
EC of its butter mountain, despite Spanish and Portuguese
opposition.
    The scheme will pay for the disposal of one mln tonnes of
unwanted butter, by selling it at knock-down prices, turning it
into animal feed or exporting it at subsidised prices.
    National capitals are due to be reimbursed later out of
savings from another plan to curb milk production.
    Diplomats said Spain and Portugal have been angered by the
scheme, which they feel forces them to pay for massive
surpluses built up before they joined the community last year,
but the two countries did not block today's vote.
 Reuter
