Hogg throws lifeline to farmers

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Douglas Hogg, the Minister of Agriculture, yesterday unveiled to the House of Commons a range of measures designed to throw a lifeline to embattled beef farmers "in their hour of need".

The package is centred around the promise of about pounds 500 compensation for every animal over the age of 30 months removed from the food chain and additional cash help for the slaughterhouses.

Mr Hogg said the Government was considering culling limited numbers of individual animals "in the low tens of thousands", but ruled out mass slaughter.

He emphasised that the scheme would only be pursued after consulting interested parties and "in the context of a clear understanding about the lifting of the EU ban".

The compensation scheme for farmers for each cow slaughtered at 30 months of age or more under a European Union scheme will come into effect in the week beginning 29 April.

The Government will pay a supplement for steers and heifers brought to market at over 30 months because they usually fetch significantly more than cull cows. Typically they fetch between pounds 700 and pounds 1,000.

To compensate farmers for the shortfall and to allow them to adjust production systems they are being offered an pounds 80m package over six months. The top- up will be set at no less than 25p per kilo for the first four weeks of the scheme. Officials are also working on a scheme to allow exemptions from the 30-month slaughter rule for specialist breeds with no history of BSE.

"Many are in herds with no history of BSE. The case for exempting animals such as these from the 30 month rule is very strong," Mr Hogg said.

Organic beef producers feared their cattle would be needlessly destroyed at a time when their sales are rocketing in the wake of the BSE scare. There are 130 registered organic beef farmers, rearing 3,500 beef cattle a year. On average they fetch pounds 1,000 per animal or 130p per live kilo.

A report from the accountants Coopers & Lybrand had found unsold meat worth pounds 132m, at pre-crisis prices, which could lead to widespread company failures soon.

Mr Hogg said a pounds 110m aid scheme, consisting of two elements, would replace the waiving of the pounds 53m annual charges from the Meat Hygiene Service announced last week.

The first is pounds 30m to compensate for every bovine slaughtered during 1995 and 1996, at pounds 8.75 a head. The second. costing pounds 80m, is that the Intervention Board will purchase the unsold stocks at 65 per cent of the market price prior to the BSE crisis. Slaughterers will be paid for the unsold meat once it is transported to Intervention stores. The Government will then take responsibility for its disposal.

Mr Hogg said he was pursuing ideas for quality assurance schemes with food retailers to help restore confidence in British beef and was proceeding urgently with arrangements to improve animal identification and traceability and he hoped to introduce system of mandatory animal "passports" from 1 June.

The minister added that he was writing to every beef and dairy farmer in Britain setting out the measures announced yesterday, which he said should go a long way to reassuring them that "they can rely on the full support of the Government in this, their hour of need".

A Government-commissioned report from Coopers & Lybrand, published yesterday, warned that up to one third of Britain's 430 cattle and mixed species abattoirs would close without urgent Government action.

The management consultants' reportalso warned that up to 28,000 slaughtering and meat processing jobs could be lost too.

It added that even before the latest, and worst ever BSE crisis, the slaughtering industry was suffering from serious over-capacity and very low profit margins. Its assumption was that there would be no recovery at all in British beef exports for at least six months, and they will not recover fully for at least five years. Mr Hogg said he did not accept those assumptions.