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  * Market Forces May Compensate British Farmers
    For French Insistence On Banning UK Imports
 
 
    By David Walker, agricultural economist
    Bridge News
    NORWICH, England--It is a commonly held and probably accurate perception 
in Britain that -- putting aside the mad cow disease issue -- British beef is 
of higher quality than what is produced on the Continent.
 
    But the issue of mad cow disease, or BSE, was supposed to have been put 
aside by the European Union's decision to open up Continental markets to 
British beef on Aug. 1.
 
    France has, perhaps rather arrogantly, failed to lift its embargo on 
British beef. In doing so, it is ignoring its commitments to EU law, even in 
the face of high-profile lobbying.
 
    This has not been taken well in Britain.
 
    Before BSE (bovine spongiform encephalopathy), as much as 30 percent of 
British beef was exported to the Continent, with much of it going to premium 
and niche markets. The major source of Continental beef is culled dairy 
animals, with less beef production from younger, more tender animals than in 
Britain. In culinary terms, while British beef cuisine features simple roast 
beef, on the Continent more elaborate preparation is necessary to make beef 
appetizing.
 
    The image of British beef changed dramatically, however, on March 20, 
1996, as a result of a poorly worded news release from the British Spongiform 
Encephalopathy Advisory Committee. This committee had been set up in 1990 to 
advise the government on the health-related aspects of BSE.
 
    The news release noted that the 10 cases of new variant Creutzfeldt-Jakob 
Disease, a rare but fatal human disease, were ''in the absence of any 
credible alternative at present ... linked to exposure to BSE.'' A revised 
and milder statement four days later did little to help.
 
    British beef imports were banned by everybody within a matter of days. 
Ironically, incidents of BSE had by then been on the decline for three years 
because the apparent source of infection, the use of bovine meat and bone 
meal in cattle feed, had been banned in 1989.
 
    The demands of the EU for the eventual removal of the export ban, 
however, eventually included the removal of all animals over 30 months of age 
from the British supply chain and a number of other provisions mainly aimed 
at ensuring that this happened. These even went as far as individual 
passports for cattle.
 
    By June of this year, the EU was sufficiently confident about the actions 
taken by UK authorities that it ordered a lifting of the export ban, 
effective Aug. 1.
 
    It was certainly expected that selling British beef on Continent would be 
a major marketing challenge. That it was to be a political challenge was not 
anticipated, because member states of the EU were legally obliged to accept 
the EU's decision.
 
    The Germans were the first to hesitate. After some initial stalling, the 
understanding was established that delays in the sale of British beef in 
Germany were caused by the need to make the necessary changes to regulations, 
the need for which had supposedly not been anticipated.
 
    The French, however, claimed earlier this month that their new food 
safety agency has reason to believe that British beef was still not safe.
 
    When the French agency's 300-page report was submitted to the EU in 
Brussels, it appeared that there was little if any new information in it and 
that the major concerns of the agency had resulted from misunderstanding.
 
    In Britain, this was seen as at best incompetent and at worst as 
mischievous. Even before the content of the report was known, the almost 
universal opinion in Britain was that the report was bogus and the issue had 
blown up into a major political row.
 
    The preferred diplomatic route was undoubtedly to provide the French with 
some quiet and graceful exit, but the publicity created now makes this 
difficult.
 
    The Channel ports and French-owned facilities have been picketed. The 
British minister of agriculture, among others, has called for a boycott of 
French food products. British supermarket chains have removed French food 
from their shelves. Riot police were mobilized in Paris to control a 
demonstration by 10 British members of the European Parliament.
 
    Now, counterclaims over the safety of French beef have been made, notably 
the revelation that some French farmers have been giving their cattle feed 
made from human and animal sewage sludge.
 
    In the short term, these well-publicized developments are probably 
positive to British beef-market prospects. Because it is portrayed as a trade 
rather than food safety issue, most British consumers are likely to consider 
it patriotic to buy British beef. In the longer term, all of this only adds 
to the challenge of regaining British export markets on the Continent.
 
    The most subtle and probably far-reaching action, however, was the 
release of a report by independent British scientific advisors on Oct. 19. 
This concluded that the EU's scientific evidence does not support the 
continued ban on the use of hormone growth promoters in beef production, or 
indeed the ban on imports of US and Canadian hormone-produced beef.
 
    The British minister of agriculture emphasized, however, that while 
Britain did not agree with the EU hormone-beef decisions, it was abiding by 
them. The intent of this statement was undoubtedly a message to France that 
Britain honors its EU commitments, even if they are inconvenient. The less 
charitable interpretation is that the statement was a message to the United 
States and Canada not to target imports from Britain with their World Trade 
Organization-sanctioned import levies.
 
    Conversely, this might be regarded as an open invitation for the United 
States and Canada to continue to target the exports of Britain's fellow EU 
members. This will surely be regarded as below the belt in Paris. McDonald's 
and others have already felt the ire of French farmers over existing US 
tariffs on EU farm products, particularly from France.
 
    The chances of the diplomats negotiating a graceful exit from the beef 
controversy for the French do not look good.
 
    But is this all just good media copy? On this there will be an answer. If 
the British do feel slighted, they will surely demonstrate their patriotism 
at the beef counter. And this will be measured by the ultimate barometer, 
market price.
 
    Confirmation is pending.
 
    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. His views are not necessarily those
of Bridge News, whose ventures include the Internet site http://www.bridge.com/.
 
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