Europe’s Farmers Face Price Freeze : Common Market Executives Aim to Cut Surplus Stocks

Common Market executives proposed Wednesday to freeze the guaranteed prices paid to the European trade bloc’s 11 million farmers and announced plans to sell large quantities of surplus butter and meat on world markets to reduce its huge surplus stocks.

The Executive Commission also proposed to tax grain farmers who overproduce.

The proposals for the farm marketing year that begins April 1 were announced by Frans Andriessen, the commissioner in charge of the Common Market’s agriculture policy.

Andriessen said at a news conference that the measures were aimed at reducing the bloc’s costly overproduction of farm products and making its farm goods more competitive on world markets.

The proposals must be approved by the 12 member governments of the Common Market. Agriculture ministers, who traditionally spend months debating the annual farm price measures, are scheduled to hold their first meeting on Andriessen’s plan Feb. 24-25.

Last year, the farm ministers could not agree on price levels until more than a month after the April 1 start of the 1985 marketing year.

Even then, they had to approve the package without settling on prices for grain farmers because West Germany stood alone against a proposed reduction.

The main European farmers organization, known as COPA, recently said that prices for the 1986 marketing year should be increased by an average of 4.7%.

Discourage Overproduction

Andriessen, however, told reporters that “the existing market situation would hardly take any price increases at all.”

He said prices had to be held down in order to discourage overproduction that has made farm subsidies an enormous drain on the Common Market’s commonly financed budget. The 1986 budget of about $31 billion devotes nearly two-thirds of the total to subsidizing farmers.

Andriessen said the money crunch had become worse as a result of a recent sharp decline in the value of the U.S. dollar. That has increased the amount that the Common Market is obliged to pay as compensation to farmers whose prices are above the world level.

The commissioner said the trade bloc’s member governments would be asked to chip in an extra $675 million to this year’s farm budget to cover unexpected expenses.

Besides proposing an overall freeze on prices paid for most farm products, Andriessen said the commission wanted to introduce what he called a “co-responsibility levy.” This would be a 3% charge paid by grain farmers on production that exceeded a predetermined limit.

The idea is to force the farmers to share in the cost of maintaining grain surpluses, he said.

As of Sept. 30, the Common Market reported that it had 16.9 million metric tons of surplus grain--triple the level of a year earlier--while beef surpluses totaled 790,000 metric tons and excess butter inventories totaled 1.2 million tons. The value of all surplus farm stocks amounted to $8.1 billion.