Grain mountain getting bigger

Press, 3 August 1985, Page 19

Grain mountain getting bigger

From

LIZ BARDER

in Brussels

European farmers are set to produce a near-record grain harvest this year, posing grave problems for the E.E.C.

Estimates show that this summer’s yield will fall just short of last year’s record-breaking 155 million tonnes, but already there is a 25 million tonne grain surplus held in store for which there is no market.

A Green Paper, just published by the E.E.C. Commission in Brussels, recommends cutting cereal guaranteed prices to farmers as the only means of reducing the food mountains. But hopes of achieving this are fading. The commission president, Jacques Delors, apparently under pressure from the' French Government, has approved a $550 million “sweetener” to persuade West Germany to lift its veto on a less than 2 per cent cut in the E.E.C. cereal price. Lord Cockfield, Britain’s senior E.E.C. Commissioner, said the move made nonsense of the commission’s attempt to cut grain prices. “Is it coherent to publish a Grefen Paper on the Common Agri-

cultural Policy reform which puts forward a price reduction for the cereal sector and at the same time to agree to measures with the practical effect of negating that idea?

The ‘sweetener,” which was offered to the West German Farm Minister, Ignaz Kiechle, was accepted but did not have the desired effect of getting the Germans to lift their veto. The concessions are calculated to add an extra 5 per cent to the cereal price in West Germany.

The commission says it will, nevertheless, go ahead and implement a 1.8 per cent price cut in the cereal sector from August 1, but this is no longer regarded as having any relevance. Weakened resolve over controlling the grain mountain will lead not only to exorbitant expense in administering the C.A.P. but also to the worsening of relations between the United States and the E.E.C., who are in a less

than muted trade war over the policy. The United States Agriculture Secretary, John Block, has been stepping up his attack on the E.E.C. agricultural policy as Europe and the United States engage in ever more cut-throat competition for world markets. The high E.E.C. prices allow Europe’s bigger and more efficient farmers to make considerably higher profits than their American counterparts. European farmers also enjoy permanent export subsidies, which the United States farm administration uses only as an emergency measure.

A recent United States Department of Agriculture study estimated that a similar subsidy programme would cost the American Government more than $3 billion. American agricultural experts say it would be cheaper for the United States to buy and destroy its surplus wheat than to pay export subsidies to dispose of it on the world market.