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    THE BridgeNews FORUM: On farming, farm policy 
    and related agricultural issues. 
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* The Removal Of All Cattle Over 30 Months Old Was Clearly A Difficult 
  Measure, As Was The Ban On Feeding Meat And Bone Meal To Livestock  
  
 
    By David Walker, agricultural economist 
    BridgeNews 
    Norwich, England--Facing a growing crisis of consumer confidence in 
beef, the European council of agriculture ministers at an emergency 
meeting December 4 agreed to some uncharacteristically thorough measures 
to combat BSE (Bovine Spongiform Encephalopathy), or mad cow disease. 
  
    Eating BSE-infected beef is widely believed to cause a form of 
Creutzfeldt-Jakob Disease, a rare but fatal human disease. BSE itself is 
known to be spread mainly through infected meat and bone meal used as 
animal feed. 
  
    One measure approved, the E.U.-wide ban on feeding meat and bone meal 
to any type of livestock was clearly a difficult measure to get accepted 
as long as most member states were able to claim to be free of BSE. 
  
    Attitudes have clearly changed with the rising incidence of BSE in 
France, including a realization many cases were going unreported. 
  
    The six-month limit to the ban was almost certainly a necessary 
compromise, with no doubt many member states hoping to get the ban lifted 
if there is no further evidence of the spread of BSE. 
  
    The more surprising decision was the "purchase for destruction" 
scheme, to remove from the food chain all cattle over 30 months old, also 
on an E.U.-wide basis. This is aimed at restoring consumer confidence and 
should provide the type of assurance consumers seek.  
  
    Such a program has proven successful in Britain. But the cost has been 
phenomenal, almost 400 million pounds a year for compensation and 
disposal. And the European Union's cattle population is about five times 
that of Britain. 
  
    As only one-third of member states (Britain, Ireland, Portugal, France 
and perhaps Belgium) have had more than isolated cases of BSE, this might 
seem like overkill. 
  
    On closer examination, however, it makes sense. In the first instance, 
exceptions will be made for cattle subjected to recently developed rapid 
BSE-detection tests and assessed to be free of BSE. All "at-risk" animals 
are to be tested after Jan. 1, 2001 and all animals aged over 30 months 
from July 1, 2001.  
  
    In the past, when there was lower sensitivity to the danger of BSE, 
these tests were considered not good enough. Now, as an adjunct to the 30- 
month scheme, they've been accepted. 
  
    The 30-month scheme really starts to make sense in the marketplace, 
where there appears to be a fortuitous confluence of political and 
economic interests. 
  
    The crisis of confidence in beef is reported to have resulted in a 40- 
percent cut in demand and up to a 25-percent drop in cattle prices. It was 
never politically feasible for the European Union to leave French beef 
producers in the lurch in their time of greatest need. 
  
    Provisions enhancing market support through intervention buying of 
beef were introduced both prior to, and as part of, the program agreed to 
by the council of agricultural ministers. 
  
    The major challenge here for the European Union was that it would end 
up owning mountains of beef for which there were, at any price to anybody, 
very poor sales prospects. 
  
    It is seems, however, to be cheaper simply to dispose of large numbers 
of cattle and pay the necessary compensation than to go to the expense of 
buying, preparing and storing beef. 
  
    The comparative costs quoted are 1,400 euros per tonne (about 2,200 pounds)  
for destruction and compensation and 2,000 euros per tonne for 
normal intervention. 
  
    Further disposal through the scheme and resulting market support will 
be greatest immediately but will decline as more cattle are excluded 
through testing. After six months only animals tested as having BSE will 
be destroyed. 
  
    The hope is that consumer confidence will return to absorb the 
increasing supply of beef resulting from declining levels of over 30-month 
disposals. 
  
    The European commission described this element of the scheme as 
"rebalancing the market." Whether a return to normal beef market 
conditions will be as smooth as planned is another matter. 
  
    It will be another four or five years (the incubation period for mad 
cow) before it becomes clear these measures have actually achieved their 
desired goal, the eradication of the disease. 
  
    The incidence of mad cow will surely increase in the short term as 
universal testing is implemented. The partial testing over the last few 
months has significantly increased French mad cow reports. More 
comprehensive testing will surely result in more reports. 
  
    More uncertainty exists for member states known to be at risk, having 
fed potentially BSE-infected meat and bone meal in the past, but which 
have, against independent expectations, not reported until recently any 
incidents of mad cow disease. These countries that have actively opposed 
meat and bone meal restrictions will either be vindicated or vanquished.  
  
    But more important, an increase in BSE reports in these countries will 
likely delay the recovery in beef demand, even with the new precautions in 
place. 
  
    But if the testing turns up more BSE than expected, more "rebalancing" 
comes into play. 
  
    Because most member states have whole-herd slaughter policies, a 
single report of BSE results in the output from the entire herd being 
removed from the market. The 100 cattle reported as having BSE in France 
this year are of no importance to beef supply, but the 100 herds 
eliminated could be.  End 
  
    DAVID WALKER, an agricultural economist, lives on his family's farm 
outside Norwich, England. He recently served as senior economist in London 
for the Home-Grown Cereals Authority and previously was executive director 
of the Alberta Grain Commission in Canada. He maintains a Web site at 
http://www.openi.co.uk/. His views are not necessarily those of BridgeNews, whose  
ventures include the Internet site http://www.bridge.com/. 
  
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