EU’s strategy on US beef risky

Despite the rhetoric from Donald Trump during his visit to the UK about a trade deal, Washington is focusing on better relations with Brussels and the EU. In a significant move, the EU has agreed that the lion’s share of its 45,000 tonnes special tariff quota for beef can be filled by beef from the United States guaranteed not to have come from animals treated with hormone growth promoters.

This is a risky strategy for the EU and it is already being criticised by others, including Australia, for favouring the US.

The US is now the number one supplier of soya to Europe, accounting for 22% of exports.

Meanwhile, a number of industry bodies in Europe have again warned of

the consequences for beef, poultry and ethanol of the generous trade deal the EU is planning with the Mercosur countries of South America.

Brussels is still hoping to finalise this by the early autumn when the term of the present commission ends.

The European Commission has angered the Irish farming lobby by seemingly adding conditions to its offer of 50 million euro for beef farmers to offset the impact of market uncertainty surrounding Brexit.

This will be matched by the Irish Government.

The farming lobby in Ireland had been pushing for a simple scheme, but Brussels now wants it tied to a plan to reduce production, to reflect market conditions, and to restructure the industry to leave it better placed to cope with Brexit.

The draft document recognises the scale of the threat, with 50% of Irish beef exports going to the UK.

But while Brussels recognises the impact of falling margins, it warns that the track record of the industry is of being too slow to change to reflect market conditions.

This will lead to a battle firstly between Brussels and the Irish government, and secondly with the Irish Farmers’ Association, which wants the entire fund to go as a income support payment to beef farmers in general and suckler producers in particular.

Back in Britain, farmers face even more uncertainty over Brexit as politics focuses more intensely on the battle for leadership of the Conservative Party.

This puts two key issues much higher on the agenda – a no-deal Brexit and a general election within the next six months.

We know from the farming lobby that a no-deal exit from the EU would be bad for farming and a general election could end the commitment to maintain farm support at CAP levels until 2022.

It would also bring even more uncertainty to the Brexit process.

The US is now the number one supplier of soya to Europe.