By JOHN DARNTON ... April 17, 1996 ... NY Times

LONDON -- Four weeks after setting off a public scare about the safety of British beef because of mad cow disease, the government said Tuesday that beef sales in Britain were recovering.

Agriculture Minister Douglas Hogg told Parliament that Britain's consumption of beef was back up to 85 per cent of the level before March 20, when the announcement was made of a possible link between the fatal bovine disorder and a similar disease in humans. He said that market sales of cattle had reached 60 per cent of its pre-crisis levels.

But Hogg did not mention the deep price-cutting that supermarkets have instituted to lure back consumers. Some have been selling beef at 50 per cent off the usual price and many of those doing the buying appear to be poorer families trying to stretch their food budgets.

Cattle farmers say they are taking heavy losses and that when the animals can be sold they are going for prices that are down by about one-fifth.

Hogg provided the sales figures while presenting some details of a modest culling of cattle in an effort to further restore consumer confidence and a program of compensation to slaughterhouses, beef renderers and cattle farmers.

Moments before he spoke, Prime Minister John Major, whose Conservative government has been widely criticized for its handling of the crisis, told Parliament that Britain would go to the European Court of Justice to challenge the worldwide export ban on British beef and beef products imposed by the European Union on March 27.

An extra impetus for the court challenge came over the weekend when the agricultural commissioner of the European Union, Franz Fischler, said in an interview with Reuters that he himself thought British beef was safe to eat but that the ban was needed as a way to restore confidence. His remarks, widely covered here, angered farmers and government officials.

Agricultural representatives from the 15-nation group are supposed to meet at the end of April to consider whether British measures are sufficient to lift the ban.

Hogg said that a previously announced program to kill and dispose of all cows over 30 months of age as they reach the end of their productive lives, at a rate of about 15,000 a week, would begin April 29.

The program will affect mostly dairy cows, which live longer than cattle raised for beef and show a higher incidence of mad cow disease, or bovine spongiform encephalopathy. The aging dairy cows will be destroyed rather than sold for use in food products, as most are now.

Farmers would be compensated at a rate of about $750 per cow. For six months the government would pay an extra "top up" to owners of steers and heifers over 30 months old. Customarily these are slaughtered at a younger age but some breeds mature later and are worth much more than diary cows.

Rescue Package for the Beef Industry

Farmers last night welcomed the announcement from Douglas Hogg as a first step towards putting the industry back on its feet after the crisis over the possible link between "mad cow" disease and Creutzfeldt-Jakob disease. But they were concerned about the threat of further culls and said many farmers could still suffer serious financial loss.

Sir David Naish, president of the National Farmers' Union, said: "Prompt payment of the compensation and the removal of devalued carcasses from cold stores will help the industry as it attempts to meet the renewed public demand for beef." Tony Loud, who runs a 200-cow family dairy farm near Okehampton, Devon, said: "The compensation announced by Mr Hogg for old milking cows is acceptable. But we are very worried by his reference to possible further selective culls of animals deemed to be susceptible to BSE. We do not see any need for that at all."

James Burnett keeps 1,100 prime beef cattle near Newark, Nottinghamshire, which are all over the age of 30 months and face destruction. "The compensation for beef farmers like me is not as bad as I feared, but I could still face a loss of up to £250,000 over a full year," he said.

About £630 million of the aid package will be spent on the slaughter and disposal of cattle over 30 months old, which are considered to be at greater risk of being infected with bovine spongiform encephalopathy.

There will be £110 million to help slaughterhouses. Some £80 million of this will be used to buy an estimated 40,000 tonnes of stockpiled beef which cannot be sold because it comes from older cattle or because there is no demand. The meat will probably have to be destroyed.

In addition, up to £80 million will be paid to abattoirs and farmers for the slaughter of male calves from dairy herds immediately after birth. Nearly all these animals, up to 500,000 a year, were previously exported for the continental veal trade. They may now be made into pet food.

Rendering plants, which specialise in processing animal waste, will receive £118 million in aid. Mr Hogg said the plants had "substantial surplus capacity" and would be mainly responsible for treating and burning the waste material, offal and carcass meat that would no longer be allowed into the food chain.

According to an audit prepared for the Ministry of Agriculture by the accountant Coopers & Lybrand, 15,000 old cows and 6,000 beef animals over 30 months old will have to be slaughtered and destroyed each week, implying the destruction of about a million cattle in a year.

Old cows at the end of their productive life would have been slaughtered anyway. But instead of being turned into burgers and pies they will be destroyed. Farmers will get 86p a kilogram liveweight, averaging nearly £500 per animal, roughly the market price they would have fetched before the BSE scare.

The European Union will pay 70 per cent of the cost of this compensation. But the Government will have to pay for the disposal of the carcasses. It will also pay a top-up payment of 25p a kilogram to owners of prime beef cattle over 30 months old, which are much more valuable than old dairy cows.

There are estimated to be 300,000 prime beef cattle on farms above this age limit which cannot now go into the food chain. To clear this backlog alone in a year, the animals would have to be slaughtered and destroyed at a rate of about 6,000 a week.

Mr Hogg said he was looking at other ways of identifying individual cattle or groups of cattle more likely than others to develop BSE that could be culled selectively in addition to those over 30 months old. But there would be no question of killing whole herds just because they had had a few cases of BSE.

He said: "The models we are looking at involve limited numbers of individual animals ­ in the low tens of thousands and not hundreds of thousands ­ and do not provide for the slaughter of whole herds."

The proposals for a selective cull are due to be presented to European Union Agriculture Ministers at the end of this month. There is no chance of the EU's worldwide ban on British beef being lifted until other member states have seen the proposals.

Mr Hogg said he was still discussing with the Environment Department the best and safest way of disposing of unwanted carcasses after they had been treated by rendering plants.

* A legal challenge by the British Government over Europe's beef ban would be boosted by the Farm Commissioner's admission last week that the ban was needed to shore up the European beef industry (Frances Gibb writes). Lawyers say there is no doubt that the Commission has power to impose a ban but they believe it must be done on public-health grounds.

The likelihood of success, some lawyers believe, is quite high: the grounds for legal challenge would be that the ban was disproportionate to the risk it sought to avoid. But as any legal action in the European Court of Justice in Luxembourg would be likely to take at least ten months from start to final court ruling, the chief benefit of lodging proceedings could be as a bargaining counter in any negotiations to have the ban lifted.

* The families of eight people who died from Creutzfeldt-Jakob disease after treatment with a human growth hormone obtained from the pituitary glands of dead bodies launched a High Court claim yesterday for compensation. They allege that the Government and Medical Research Council were negligent in administering the treatment.