RESTRICTED
WORLD TRADE IMA/INV/8
10January 1996
ORGANIZATION(96-0061)
Original: French International Bovine Meat Agreement
INTERNATIONAL MEAT COUNCIL
Inventory ofDomestic Policies andTrade Measures
European Community
Parties agreed to"provide information ontheirdomestic policies andtrademeasures including
bilateral andplurilateral commitments inthebovine meatsector, andshallnotify asearly aspossible
anychanges insuchpolicies andmeasures thatarelikely toaffect international trade inbovine meat
andliveanimals" (Article III:3oftheInternational Bovine Meat Agreement). TheSecretariat "shall
drawupandkeepuptodateaninventory ofallmeasures affecting tradeinbovine meatandliveanimals,
includingcommitmentsresultingfrombilateral,plurilateralandmultilateralnegotiations"(ArticleIII:4).
Thedocumentscontainingtherepliestothequestionnaireondomesticpoliciesandtrademeasures
arecirculated intheseries IMA/INV. They willberevised asandwhen changes arenotified.IMA/INV/8
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A. Information onDomestic Policies andTrade Measures
Introduction
TheEuropean Community hastaken action toadjust thecommon agricultural policy (CAP)
tomarket trends withaviewtothegeneral objectives laiddown intheTreaty ofRome, and,with
regard tolivestock farming andmeat, themeasures onrestructuring ofcattle farming decided in1992
areaimed atguaranteeing farmers 'income notonlythrough price support butalsothrough assistance
tocattle farmers intheform ofpremiums.
Livestock policy andinparticular bovine meatisbased onboth:
- themarket, i.e.thelawofsupply anddemand; and
- support measures which stabilize prices inrelation tothecyclical trend inproduction
andprices.
I. Production
(a) Cattle farming structures
IntheEuropean Community, theusable agricultural surface areacovers approximately
130million hectares andtheareausedforforage forruminants, mainly cattle andsheep, covers
approximately 55percentoftheusable agricultural surface areaasfollows:
- surface areas usedonlyforgrass, 37percentoftheusable agricultural surface area;
and
- surface areas usedforother green fodder, 18percentoftheusable agricultural surface
area.
Cattle farming (milk plusmeat) concerns roughly onefarminfour,amounting toapproximately
1.9million cattle farmers attheendof1993, andaccounts forabout onethirdofthefinalproduction
ofagriculture.
Theaverage sizeofcattle farms attheendof1993 was41animals and14suckler cows in
dairyfarms.Overthelatestcycle,cattlefarmingstructurescontinuedtoundergorapidchanges,resulting
inthedisappearance ofaround 670,000 cattle farms:
- anoticeable decline inthetotalnumber ofcattle farmers ofabout -5percentannually,
inparticular through thedisappearance ofsmall dairy farms;
- inthecontext ofthemilk-meat conversion, aslight increase insuckler cowherds of
+1.2 percentannually;
- asharp riseinthenumber ofbovine animals perfarmexceeding +4percentannually
andinthenumber ofsuckler cows perfarmofabout 4.5percentannually.
Cattle herds intheCommunity comprise typical dairy breeds, mixed dairy/meat breeds and
anincreasing number ofbeefbreeds which areeagerly sought bybreeding centres inother countries
forthepurposes ofimproving breeding stock.IMA/INV/8
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Three maincategories ofcattle farmers maybedistinguished, corresponding tothefollowing
three types ofactivity:
- cows forculling andyoung calves (milk production);
- pasture-grazed suckler cowherds andadult bovine animals (oxen);
- youngmaleanimalsfattenedinspecializedproductionpremiseswithcereal-basedfodders
(maize ensilage).
Withthelarge-scaledevelopmentoforganizedproductionofbullocks,youngmalebovineanimals
nowaccount formore thanonethirdoftotalbovine meatproduced intheCommunity.
In1994, thedistribution ofthedifferent categories ofbovine animals intheCommunity 's
production ofbovine meatwasasfollows:
Male adult bovine animals: 46.3
including -bullocks: 35.8
-oxen: 10.5
Female adult bovine animals: 42.8
including -cows
(approximately 1/3beefbreeds): 27.7
-heifers 15.1
Calves: 10.9
(b) Sanitary regulations
TheEuropean Community hasbanned theuseofhormones andother growth promoters
stimulators forfattening animals inallmember States andtothatendhasintroduced Community controls
toensure theuniform andgeneral application ofthestandards laiddown bytheCommunity forconsumer
health protection.
With aviewtorecognizing countries intheEuropean Community asfreeoffoot-and-mouth
disease, new Community measures tocombat thisdisease andnew health policy measures
(non-vaccination against footandmouth disease policy) havebeenimplemented.
(c) Meat market support and/or stabilization measures
Inthe1995/1996 marketing year,theofficial prices ofanimal products weresetatthefollowing
levels:
-intervention price formale
adult bovine animals: 347.50 ECU/100 kg.carcass;
-basic price forpigcarcasses: 157.00 ECU/100 kg.carcass;
-basic price forlamb carcasses: 504.07 ECU/100 kg.carcass.
Thereduction coefficient applicable under thestabilization system forthemarket insheep meat
hasbeenfixed at7percent.IMA/INV/8
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With aviewinparticular topromoting theimprovement ofthequality ofbovine meatplaced
onthemarket, theCommunity hasdecided tomake itcompulsory forapproved slaughterhouses to
grade andidentify thecarcasses ofadult bovine animals inaccordance withtheCommunity grading
scale forsuchcarcasses.
II. Price andintervention system
TheCommunity hasadopted measures tomanage thedomestic market thataremoreresponsive
tomarket prices. Thenewprice-support system includes inparticular:
-setting ofpurchase prices bytendering; onlycertain types identified according tothe
Community grading scale forcarcasses ofadult bovine animals areeligible;
-thethreshold prices fortriggering intervention purchases havebeensetasfollows (tendering
procedure):
Market price as%ofintervention price,
equals ECU 347.50/100 kg.Normal tender Safety net
Community market price
Market price/member States84%
80%78%
60%
Aspartofthereform ofthecommon agricultural policy, measures fortherestructuring of
thebovine andsheep meatmarkets havealsobeenagreed; forcattle farming, these measures include
asignificant decrease inthelevelofprice support, and,incompensation forthischange inpolicy,
thegranting ofdirect income subsidies notlinked toproduction levels; thesecomplementary subsidies
came intoeffect on1January 1993 andarerestricted:
-atthefarmlevel, toathreshold oflivestock units(LSU) perhectare ofsurface under fodder;
and
-attheCommunity level, toaceiling onthenumber ofanimals eligible forsubsidies under
theintegrated system forthemanagement ofreference herds, respectively:
- 11.4million suckler cows ofbeefbreeds; and
- 11.2million malebovine animals.
Areduction of15percentinthree phases oftheintervention price forClass R3maleadult
bovine animals willbecome effective on1July1995.
Thequantity ofbovine meat subject tointervention inthetendering procedure isrestricted
to:
1995: 550,000 tonnes;
1996: 400,000 tonnes;
asfrom 1997: 350,000 tonnes.IMA/INV/8
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Intervention purchases under thesafety net(notincluded inthequantities mentioned above)
canonlytakeplace inacountry where themarket pricedoesnotexceed 60percentoftheintervention
price.
Inorder toimprove thefattening ofbovine animals, itisproposed that,from1993, zeroquality
carcasses under theCommunity grading scaleshould begradually excluded fromofficial intervention.
Asmarket prices wereabove thethreshold fortriggering intervention measures inthedownward
phase oftheproduction cycle, sincetheendof1993therehasnotbeenanytender offernorintervention
purchasing.
Inspring 1995, theintervention stock ofbovine meatwaslessthan20,000 tonnes.
2. System ofpremiums
Thegranting ofpremiums forcattle farming issubject toadensity criterion inLSU/ha.
permanent surface areaof2.5LSU/ha. in1995 and2.0LSU/ha. from 1996.
Thiscriterion doesnot,however, apply when thenumber ofcattle perfarmdoesnotexceed
15LSU.
Inaddition, afurther complementary premium ofECU 36.2pereligible headmaybegranted
when thedensity doesnotexceed 1.4LSU/HA.
(i) Special premium foryoung malebovine animals
Thespecial premium foryoung malebovine animals payable fortheagegroups oftenmonths
andoverand22months andoverhasbeenfixed atECU 108.7/head for1995.
Incountries where theslaughter ofmalebovine animals attheendofthegrazing period (IX-XI)
exceeds40percentofthetotalannualfigureofanimalsslaughtered,anadditionalout-of-seasonpremium
amounting toECU 72.5/head maybegranted formale bovine animals slaughtered during thefirst
weeks ofthefollowing year.
(ii) Premium formaintenance ofsuckler cowherds
Thepremium forsuckler cows isgranted tofarmers whodonotsellmilknordairy products
orwhere theamount ofmilkproduced doesnotexceed aquantity tobedetermined onthebasis of
thereference number ofsuckler cows eligible minus 1percent(accumulation ofareserve).
From 1995, theamount ofthepremium isECU 144.9/head.
Asupplementary premium ofECU 30.2percowmaybegranted atnational level(ofwhich
ECU 24.2arefinanced bytheEAGGF (Community fund) inless-developed regions (Greece, Ireland
andNorthern Ireland, Portugal andother regions intheSouth ofItaly, Spain andFrance)).IMA/INV/8
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3. Other provisions
Thenumber ofanimals eligible forpremiums inthenewGerman Bundesländer, where stock
farming isstillbeing restructured, isstillapplicable andhasbeenfixed at:
-660,323 young malebovine animals forthespecial premium;
-180,000 suckler cows eligible;
-1,000,000 ewes eligible.
Thetotalcostofpayments made during recent years bytheEAGGF-guarantee onbehalf of
thebovine meatsector amounted to:
ECUmillions
1991 1992 1993 1994
4,295 4,414 3,986 4,084
II. Internal prices andconsumption
Inaccordance withthecyclical trends inproduction andprices, thebovine meatmarket went
through aphase ofstable prices in1993 and1994. Since then, bovine meatprices, particularly for
female bovine animals, havedeclined atatimewhen theprice ofcereal-based meats wasalready at
arelatively lowlevel.
Price trends fromApril 1994 toMarch 1995, incomparison withthose for1993/1994, were
asfollows:
ECUs/100 kg.
- 3.3% forgood-quality meatofmale
adult bovine animals:309.05 (319.50)
- 2.2% forgood-quality meatofheifers 313.60 (320.75)
- 2.0% formedium-quality meatof
cows254.50 (259.80)
+ 7.1% forpigmeat 132.00 (123.20)
+ 5.9% forsheep meat 337.40 (318.60)
- 4.8% forpoultry meat 130.80 (137.40)
eventhough theCommunity 'saverage rateofinflation wasaround 3percent.
Theconsumption ofbovine meat intheEuropean Community rosetoaround 7.3million
tonsin1994 andpercapita consumption wasabout 21kg.IMA/INV/8
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Thefollowing aresome ofthemajor factors underlying thetrend indemand forbovine meat
in1995 andsubsequent years:
-anannual population increase ofaround +0.4 percent;
-anupward revision oftheprospects foreconomic growth; and
-lastly, adownward trend inmarket prices forbovine meat, particularly inthethree new
member States.
Itisexpected thatglobal consumption in1995willbearound 7.9million tonsofbovine meat
inthe15-member Community, corresponding topercapita consumption ofaround 21.2kg.
Inaddition tothesaleatreduced prices ofintervention bovine meattoinstitutions andgroups
ofasocial character, theCommunity decided tomake bovine meatfromtheintervention stocks available
tocharitable organizations fordistribution tothose mostinneedintheCommunity (anaverage ofmore
than30,000 tonsperyear).
Finally, while giving further encouragement totheextensive rearing ofbovine meatbreeds,
theEuropean Community hasdecided topromote consumption ofhigh-quality bovine meatmore in
linewiththepreferences anddemands ofconsumers today.
III. Measures atthefrontier
1. Imports
Inaddition tothenormal import regime forbovine meat, theEuropean Community has
undertaken toimport annually alarge quantity ofbovine meatunder special multilateral orbilateral
agreements. These virtually mandatory imports amounted toaround 515,000 tonnes ofcarcass weight
equivalent in1994.
2. Exports
Although theEuropean Community hasnotparticipated toanygreatextent inthemajor import
markets thatarethemostprofitable andthemostsolvent attheglobal level, ithasmanaged todevelop
itsexports ofbovine meat tothirdcountries, mainly intheform offrozen meattaken inpartfrom
theintervention stocks, andhasbecome theleading global exporter ofbovine meat.
In1991 and1992, Community exports amounted tomore than1.3million tonnes ofcarcass
weight equivalent andin1993 and1994 tomore than1.2million tonnes.
TheEuropean Community therefore accounts foronequarter ofglobal trade inbovine meat.
3. Measures atthefrontier
Following theintroduction ofacombined nomenclature ofgoods established onthebasis of
theHarmonizedSystemwhichwasthesubjectofaninternationalconvention,theCommunityRegulations
concerning livestock farming andmeat havebeenadapted accordingly using theintegrated tariff of
theEuropean Communities (Taric).IMA/INV/8
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Under theAgreement onAgriculture oftheUruguay Round, asfrom1July1995theEuropean
Community willopenupnewimport tariff quotas for:
-50,000 tonnes offrozen bovine meat forprocessing, expressed inbone-in beefand,in
addition,
-169,000 headofyoung malebovine animals forfattening withpartial suspension ofthe
tariff equivalent, thelarge majority imported from Hungary, Poland andother Central
andEastEuropean countries.
Newregulations areapplicable toimport andexport soastomonitor andcontrol theflowof
trade inmeat.
Regarding market access, tariffequivalents andcustoms duties willbereduced by36percent
oversixyears asfrom 1July1995.
There isaceiling onexports benefiting from aidandtheywillbesubject toaquantitative
decrease of21percentandadecrease invalue of36percentincomparison withtheadjusted reference
levels forthebaseperiod 1986/90.
Themanagementofimporttariffquotasandtheceilingonsubsidizedexportsareassuredthrough
theissueofimport/export certificates andtheyaremonitored toensure observance ofthecommitments
undertaken intheAgreement onAgriculture oftheUruguay Round.
Additional import duties maybeimposed under aspecial safeguard clause if:
-Thevolume ofimports significantly exceeds apredetermined threshold, and
-importpricesareclearlybelowtheleveloftriggerpricescorrespondingtoaveragereference
prices for1986/88.
Thesearch forandcontrol ofstability inthebovine meat market hasincited the
European Community, inconnection withagreements concluded withitsmain suppliers, toadopt
appropriate measures forthemanagement ofimports ofyoung bovine animals bysetting aceiling of
425,000 animals other thanpure-bred animals forreproduction.
Inaddition tothetraditional special agreements onpreferential imports, theCommunity has
opened thepossibility ofimporting certain quantities ofbovine meatatareduced levyduring theperiod
1992-1996, inaccordance with theassociation agreements signed with Hungary, Poland, the
Czech Republic, theSlovak Republic, Bulgaria andRomania.
B. Notification ofPolicy Changes
Seeabove.
C. Information onBilateral orPlurilateral Agreements
intheField ofBovine Animals, Meat andOffals
TheEuropean Community hasexpanded some bovine meat import quotas following the
Agreement onAgriculture oftheUruguay Round andhaseased certain special bovine meatimport
arrangements, inparticular formeatfrom ACP countries.IMA/INV/8
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TheCommunity hasundertaken toincrease theimport tariff quotas:
-Forfrozen meat, from 50,000 to53,000 tonnes, and
-forhigh-quality meat, from 34,300 to54,300 tonnes.
Moreover, theCommunity hasopened atariff quota atarateof4percentof1,500 tonnes
offrozen bovine thinskirt.