PROGRESS EXPECTED ON GRAIN AS EC FARM TALKS RESUME

PROGRESS EXPECTED ON GRAIN AS EC FARM TALKS RESUME

European Community agriculture ministers are to resume negotiations for the reform of the Common Agriculture Policy today, but are still far from an overall agreement, diplomats said.

"We are making progress on reforming the cereals sector, but on beef we have nothing, not even any emerging consensus on the type of reforms we need," a U.K. official said.Portugal, which holds the EC presidency, Friday put forward a new proposal on reforming supports for grain farmers as an alternative to Agriculture Commissioner Ray MacSharry's ideas.

In July, Mr. MacSharry called for a 35 percent cut in guaranteed grain prices over 3 years starting 1993, accompanied by an obligatory land set-aside scheme, with farmers being "compensated" for their production by direct income aids calculated against their previous yields.

"To get an agreement, we have to juggle the depth and timing of the price

cut, with the level of compensation and also take into account what implications a Uruguay Round deal will have on the figures," one negotiator said.

The draft Uruguay Round agreement, which the EC has refused to accept, calls for shallower cuts over a longer time than those envisaged by Mr. MacSharry. The draft, drawn up by General Agreement on Tariffs and Trade Director-General Arthur Dunkel, calls for cuts in domestic support of just 20 percent, phased in between 1993 and 1999. At least half of the EC, including such members as Germany, UK, Italy, Denmark, the Netherlands and Belgium, think no CAP reform package should be agreed until the trade round is completed.

"How can you get agreement on compensation levels if you don't know what cuts to these amounts will be required by Gatt," a U.K. official said. But Mr. MacSharry wants the reforms adopted with or without a Gatt deal, he told a London conference Thursday. He acknowledged that problems in Gatt caused hesitation in states that saw the need to reform the CAP, and afforded delay to the less convinced.

Despite the problems of the negotiations and uncertainties over Gatt, Portugal hopes that a general political deal for grains can be hammered out in the 2-day Brussels meeting.

However, there is no prospect that ministers will agree on a formula for reforming the beef sector in the near future. Some EC states favor a radical recalculating of per-head premiums paid to livestock producers, others want the current intervention system completely overhauled and there has been suggestions from France that rigid beef quotas be introduced as a way to control heavy over-production and soaring stocks.

The ministers plan follow-up talks March 30-31, and in mid-April. Mr. MacSharry expects to have his 1992-93 farm price package approved by his fellow Commissioners by March 18, in time for the next meeting of farm ministers. He has indicated the price package will be broadly neutral and will simply roll over for another year prices and conditions in force now.