EC authorises Italian BSE aid

The aid, which will target beef producers and processors, is designed to cover the costs of compulsory destruction of specified risk materials (SRM) and the storage of low risk material. It will also form income aid for beef producers.

The measures approved are part of Italian law 49/2001, which was partially approved by the Commission at the time when the 2001 BSE crisis occurred, but was not fully ratified.

However, the EC says that income aid in favour of beef producers, granted via suspension and extension of tax deadlines and social security obligations, is authorised as aid to make good the damage caused by natural disasters or exceptional occurrences. The Commission has ascertained that there is no overcompensation either at sectoral or farmer level, considering the losses suffered in 2001.

The Italian meat sector was hit hard by the announcement on 17 January 2001 that the first case of BSE in a native-born cow had been discovered and confirmed. According to estimates quoted in the il Sole 24 Ore​ newspaper, meat consumption in January 2001 fell by 20.3 per cent on the previous year.

Beef products were naturally worst hit, with consumption down about 64 per cent. This pushed beef prices down and put hundreds of workers along the supply chain out of work.

Gruppo Cremonini, one of the leading Italian firms in the beef products sector, laid off 90 workers (out of a total of 120) employed in a plant producing hamburgers.

The EC believes that the new measure should help ensure the proper disposal of specified risk materials, of high-risk materials and of products processed/obtained/derived from them. In addition, the aid should help with the compulsory public storage of low risk animal proteins and the suspension/extension of tax deadlines and social security obligations for beef farmers and slaughterhouses and wholesale traders of meat.

The destruction of risk material and compulsory public storage are aimed at preventing BSE by assuring safe disposal of SRM and meat and bone meal. The measures thus financed comply with Community legislation.

The Italian authorities have provided assurances to the EC that the aid does not exceed €3000 per beneficiary over any period of three years, that it is within the envelope of de minimis aid for Italy and that all the other conditions for this type of aid are respected.

The final decision will be made available​ once Member States have indicated whether they want parts of the decision deleted for reasons of confidentiality.

The global beef industry's worst fear is a rerun of the BSE crisis that gripped the UK in the late 1990s. Domestic sales of beef products declined immediately by 40 per cent following reports of a possible link between BSE and new variant CJD - a human form of BSE - in 1996. Export markets were completely lost.