Written Answers. - Grain Production Shortfalls.

John Connor

Question:

80 Mr. Connor asked the Minister for Agriculture, Food and Forestry in view of the significant fall in food grain production throughout the world in 1995 and following on the drop in production in 1994 giving rise to predicted serious shortfalls worldwide in 1996, if he will make a statement on the response of the EU to this problem and if aspects of the CAP, particularly set-aside, need to be looked at. [17314/95]

The EU has already reacted to the supply-demand situation for cereals on the world market. The standard rates of set-aside, which had been 20 per cent for nonrotational and 15 per cent for rotational set-aside, were reduced to 17 per cent and 12 per cent respectively for the 1995 harvest and to a single rate of 10 per cent for 1996.

Short-term measures have been taken to provide additional supplies of cereals on the EU market and to moderate upward price pressure. These include the release of large quantities of intervention grain and the curtailment of exports by the introduction of export taxes.
The reduction in the set-aside rate to 10 per cent is expected to result in additional production of some 9 million tonnes of cereals in the EU in 1996. Furthermore, average cereal yields in the EU are expected to increase to about 5.6 tonnes per hectare by the year 2000 compared to 4.95 tonnes per hectare in 1995.
I expect the EU to continue to monitor the situation in the light of developments on the European and world markets and to adjust policy accordingly. In the short to medium-term I would not, however, expect the complete abandonment of set-aside because of fears of a return to the surplus situation of earlier years.