GRAIN farmers are likely to have their huge European Union subsidies cut to help meet the cost of the BSE beef crisis. EU farm ministers are to discuss reductions in the subsidies this week, after learning that the price of rescuing the beef industry will rise to more than £2 billion by the end of the year.
Farm ministers, meeting in Brussels tomorrow to discuss the beef crisis, will hear calls from Franz Fischler, the agriculture commissioner, for cuts in other sectors of farm spending. Cereal growers, among the largest recipients of EU cash, are the favourite target.
While beef farmers are pushed towards bankruptcy, Britain's cereal growers have seen incomes rise by more than a quarter as part of an aid programme that costs EU taxpayers £13 billion a year. British cereal farmers, who receive about £1.5 billion a year from the EU, appear reconciled to the fact that Brussels will try to curb windfall gains caused by a global shortage of grain which has pushed world prices well above those within the EU.
However, Peter Limb, who heads the National Farmers' Union's cereals committee, said his members were anxious that any reform should include a provision to push subsidies up again if the world price falls back. "World prices will remain high as along as the world shortage continues," he said. "But they are also very volatile. When the next downturn comes, farmers could be vulnerable."
European commission officials warned this weekend that the cost of buying and storing the growing mountain of unwanted beef will pass £1 billion if demand does not recover. A further £1.2 billion is being made in direct payments to British and continental beef farmers.
Britain and the European Commission are to be called before a European parliamentary inquiry to answer allegations that they mishandled the BSE crisis, MEPs decided yesterday. The move to set up a formal commission of inquiry followed anger in the Strasbourg parliament this week at reports that the Brussels executive had sought to play down the BSE crisis and suspicions that it had not taken all necessary measures to handle the disease.
The leaders of the main political blocs in the parliament decided on the brief for an inquiry yesterday. A 17-member panel is to carry out a three-month hearing to "clarify the nature and causes of the alleged infringement or maladministration of the application of Community law by the competent authorities of the European Union and the member states with regard to BSE". The state mainly targeted is Britain, and the parliament