September 2000

FARM BUDGET LATEST

The big issue in the European Parliament just now is the debate on the CAP budget for 2001. The CAP swallows up more than half of the entire funding for the EU - in excess of 45 billion Euros (£75 billion). However, I am alarmed at the emergence of a trend which openly discriminates against UK farmers and indeed farmers from other Northern European Member States.

This trend has been evident for some time and in an effort to restore some balance in the CAP budget I submitted a large number of amendments to the Committee on Agriculture & Rural Development. My worst fears were confirmed when members of the committee representing the Southern EU Member States, voted to reject many of my amendments at the committee meeting in early September.

For example, my attempts to cut the grotesque tobacco subsidy were rejected out of hand. Instead, support was given to a proposal to increase further the already bloated tobacco budget by adding another 5 million Euros. This served as a stark reminder of where the real power and voting strength lies within the European Parliament.

When the Provisional Draft Budget was produced by the Commission some weeks ago, I pointed out that the main sectors where significant increases were being recommended all fell within the ambit of the Mediterranean and Southern EU Member States. European tobacco growers stood to reap a 2% increase, taking their annual subsidy to an astonishing 984 million Euros of EU taxpayers' money, despite the fact that the European Parliament claims to be at the cutting edge of anti-smoking policy and despite the fact that tobacco kills over 500,000 EU citizens every year. Following the disgraceful vote in the Agriculture Committee they will now receive even more. It is a slap in the teeth for the health lobby. But worse, it is an insult to those of us who wish to see agricultural support handled in an even-handed and fair way across the fifteen Member States.

However, this proved to be only the tip of the iceberg. In the provisional draft budget, Europe's winegrowers were set to receive an extra 64.5%, taking their subsidies to over one billion Euros. My attempts to reduce this figure by 30 million Euros was kicked smartly into touch. The Olive Oil industry will also receive a hefty 8.9% increase, providing them with almost two and a half billion Euros next year. Even growers of sunflowers will benefit from a staggering 71% increase, giving them an annual subsidy of 2.1 billion Euros next year, despite my forlorn attempts to cut their budget by 400 million Euros.

However, I did have some limited successes in the votes. I managed to win an amendment to secure an extra 30 million Euros for marketing and advertising in the dairy sector where the Commission was proposing a paltry increase in funding of only 0.3%. With dairy farmers in the UK suffering an economic catastrophe, any additional funding is of vital importance. I also won a vote on restoring 10 million Euros to the egg and poultry-meat sector, where the Commission was proposing a significant cutback. However, my attempts to increase subsidy for the sheep meat sector, suffering its worst recession in Britain for the past 60 years, were out-voted. The sheep industry will now suffer a cut of 2.1%, following the committee's vote.

There is no doubt that the voting on the CAP budget displayed a blatant bias towards the Southern EU Member States. MEPs will have another chance to restore some balance to the system when the committee decision comes before the whole European Parliament for a final vote at a full plenary session. While the UK Conservative Members will be united in their support, it is almost certain to develop into a North South battle once again.

WHISKY SOUR

Perhaps because they had the bit between their teeth, the MEPs from the Southern EU Member States next turned their attention to the whisky industry. An amendment which I submitted which would have favoured whisky distillers was defeated by a clear North/South split in the vote.

The European Commission had already presented the Parliament with a fait accomplis by arbitrarily slashing export refunds for whisky, with the lame explanation from Commissioner Franz Fischler that whisky is a wealthy industry and needs no subsidy. Export refunds were worth between £10 million and £20 million a year to the whisky industry and took the form of compensation to distillers to cover the higher cost of raw materials sourced within the EU, where the CAP regime has kept prices artificially high, rather than outside, where world market prices are generally lower. This was particularly important for whisky distillers who buy 700,000 tonnes of barley, 258,000 tonnes of wheat and 77,000 tonnes of maize annually. It was obviously of key importance to our cereal farmers as well.

It was interesting to note that, having singled out the whisky industry for special treatment, the Commission meanwhile left the pasta and confectionery trade firmly alone. Presumably Commissioner Fischler has been persuaded that Italian pasta and Belgian chocolates are in a financially precarious state compared to Scotch whisky. In any case, there was such a row in committee about the export refunds cut that the Commission proposed a compromise. Typically, their solution placed politicians in a no-win situation. By offering to pay inward processing relief subsidies to distillers who import grain from outside the EU, the Commission were effectively encouraging the whisky industry to bypass UK farmers and purchase their barley, wheat and maize from world suppliers like America or the Ukraine. The fact that EU taxpayers' money would be used to fund this bizarre transaction added insult to injury. If MEPs supported this compromise they would win the support of distillers but anger UK farmers. If we opposed the compromise the opposite would be the case.

In the event, my amendments calling for favourable treatment for those industries which had lost out on export refunds, were defeated. Once again, French, Spanish, Greek and Italian MEPs joined forces to ensure Scotch whisky received no special favours. I have now joined with three other Scottish MEPs in a cross-party whisky industry support group to protect Scottish interests when they are threatened by such arbitrary and unfair actions in the future.

DEFYING GRAVITY

Supporters of the plummeting Euro are now engaged in a gravity defying spectacle which is becoming increasingly amusing. They are arguing that what goes down must go up, which as any school child would know, defies the basic principles of Newton's Law. The single currency has lost 25% of its value against the dollar since it was launched a mere 20 months ago and shows no signs of recovering from its relentless freefall. Nor can the Euro enthusiasts continue to claim that it is all the fault of the strong pound. In fact the pound is not strong at all. It has fallen to a fifteen year low against the dollar. Nevertheless, international investors see the UK economy as a safer bet than the over-regulated, politically controlled Eurozone, where the stresses and strains grow daily more apparent.

Already we have been treated to the spectacle of the over-heating Irish economy where an interest rate rise is urgently required to prevent a boom and bust scenario from developing, in sharp contrast to the German economy which needs lower interest rates to help kick-start their faltering economic progress. However, both Ireland and Germany have to rely on the ECB (European Central Bank) in Frankfurt to determine a single set of interest rates to suit all eleven countries in the Eurozone. This 'one-size-fits-all' nonsense is unworkable. Most of the time the ECB's interest rates will suit only a minority of countries....usually the bigger ones with the greater political muscle like France and Germany....while small Member States like Ireland are hung out to dry. Thank goodness Britain didn't sign up to this economic madness. Let's hope that we have the sense to keep it that way.

BAN FRENCH BEEF

I have written to Commissioner Franz Fischler demanding an immediate ban on French beef exports following reports of massive underestimates of BSE in the French herd. Reports have disclosed that disturbing levels of BSE have been discovered in French cattle following new tests which the French government launched in July. It now appears from early screening results that up to 1200 infected cattle may have been passed fit for human consumption in France during the last year. The screening programme has revealed that up to two cows in every 1,000 tested have the disease."

In addition to demanding an urgent Commission statement on the French BSE crisis I have also called on UK Agriculture Minister Nick Brown to impose an immediate ban on imports of French beef into Britain under the terms of the precautionary principle. It is ironic that France continues illegally to ban the importation of British beef, which is now the safest beef in the world, while the UK allows potentially dangerous French beef unhindered access into Britain.

Until very recently the French were boasting about the safety of their meat and urging Britain to copy their strict BSE controls. However, British farmers have repeatedly warned that the French whole-herd slaughter policy was providing a hostage to fortune. It was obvious that many French farmers would send infected cattle for slaughter and subsequent entry into the food chain, at the first sign of infection, rather than risk their whole herd being destroyed if BSE was diagnosed. Now these test results have confirmed our worst fears.