§ Mr. French
To ask the Minister of Agriculture, Fisheries and Food what was the outcome of the Agriculture Council held in Luxembourg on 28 and 29 October; and if he will make a statement. 
§ Mr. Douglas Hogg
I represented the United Kingdom at this Council in Luxembourg, accompanied by my right hon. Friend the Secretary of State for Scotland, my noble Friend the Parliamentary Under-Secretary of State at the300W Scottish Office, my noble Friend the Parliamentary Under-Secretary of State at the Northern Ireland Office and my hon. Friend the Parliamentary Under-Secretary of State, Welsh Office. Agreement was reached by qualified majority, Germany voting against—on a package of measures to re-adjust the EU beef market in the wake of the BSE crisis.
The Council invited the Commission to allocate a total sum of 500 million ECU to EU beef farmers whose incomes have fallen as a result of problems on the beef market. The United Kingdom's share of this sum, which is proportionate to our share of the total number of beef cattle in the EU, will be 13.1 per cent. This will provide some £50 million as further help to UK beef producers. The precise method of allocation of the funds will be decided in the light of further consideration in the Council and consultation with the UK farming unions on the preferred approach.
The Council agreement also made some important changes to the operation of the EU beef regime so as to bring production more closely into line with present and foreseeable demand. In particular the calf processing scheme, which has operated in the United Kingdom since April this year, is to be extended to include male calves of all breeds, not just dairy breeds as at present. This scheme, coupled with a scheme to pay an early marketing premium for calves sold as veal, is intended to reduce the number of calves going for beef production by some 1 million animals and hence limit the need for costly market management measures such as intervention purchasing. The Council also decided to cut the regional ceilings for payment of beef special premium in most member states in order more closely to align production with demand. However I successfully resisted any cut in the United Kingdom's regional ceiling in view of the fact that in the United Kingdom applications for this premium have regularly exceeded the ceilings fixed.
Amongst other features of the Council's agreement was a welcome boost for extensive beef production in the form of a new premium of 52 ecu per head for producers with a stocking density of less than one livestock unit per hectare. I estimate that this could be worth as much as £15 million to UK producers. The Council also agreed to a raising of the ceiling on intervention purchases in 1966 and 1997. Following pressure from the United Kingdom and other member states, the Council also committed itself to a more fundamental reform of the EU beef regime to be completed in the course of 1997.
As to the funding of this package of measures, there will be no immediate cut in arable area payments. However the Council made clear its intention to postpone payments of oilseed advances in 1997 in order to allow beef market-related costs to be met in the course of this budget year without breaching the agricultural guideline. Moreover, in respect of additional costs falling in 1998, the Council agreement stated explicitly that all necessary measures would be taken to ensure that expenditure on agriculture in that year remains within guideline. These assurances were important for the United Kingdom in view of the paramount need to observe budgetary discipline.
The Council also had a presentation by the Commission of a proposal to introduce an EU-wide system of cattle traceability, with a linked proposal on the labelling and 301W promotion of beef products. The United Kingdom attaches importance to reaching an early agreement on the cattle traceability proposal, and will work constructively to achieve that end. I also raised in the Council the need for rapid implementation of the Council directives on the protection of animals in transport, in particular requesting the Commission to bring forward urgently its proposals for Council decisions on staging points and livestock vehicle standards. I also pressed for the rapid discussion and implementation of the rules governing producer organisations in the fruit and vegetable sector in the wake of the reform of the regime earlier this year.