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Non-Tech : New Holland and the Ag Equipment Group -- Ignore unavailable to you. Want to Upgrade?

To: Bob Rudd who wrote (60)	3/12/1999 10:59:00 AM
From: Bob Rudd	Respond to of 113

Changes in European farm subsidy structure may impact NH & AG, but I'm not sure whether worse was expected and the impact is favorable relative to expectations...or the impact hadn't been factored at all in which case it's a negative. Anyway here's excerpt of WSJ article: March 12, 1999 Business and Finance - Europe EU Farm Agreement Faces Some Criticism Over Cost "And European farmers' groups, who staged a mass demonstration against the plans three weeks ago, immediately condemned the accord as threatening the livelihood of Europe's agricultural community. Comprehensive Pact Praised Nonetheless, EU Agriculture Commissioner Franz Fischler praised the ministers for resisting political pressures and agreeing on "the most comprehensive and far-reaching reform" in the nearly 40-year history of the Common Agricultural Policy. He said the changes would make EU farming more competitive internationally and reduce food costs for consumers. "We have more or less hit the nail on the head," said German Agriculture Minister Karl-Heinz Funke, whose country currently holds the EU presidency. Under the accord, the EU will cut prices guaranteed to farmers by 20% for cereals and beef and by 15% for dairy products, compared with reductions of up to 30% originally proposed by the commission. To cushion the impact on farmers, the ministers agreed to phase in the cuts, with the most gradual changes coming in the dairy sector. Farmers will also receive direct payments to compensate for all of the price cuts in dairy and beef and about 50% of the reduction in cereal prices. "This has made it possible for us to be in a strong position" for negotiations to liberalize world trade, which are due to start at the end of the year, said Mr. Fischler. But this is unlikely to be the case if the U.S. and other major agriculture producers stick to demands for the phasing out of export subsidies for farm products. Despite the cuts, EU prices for some products are likely to remain above world levels. In such cases, the EU steps in to make up the difference, subsidizing its exports. U.S. Expects More "We're somewhat disappointed that they didn't achieve the original goal," said a U.S. official, who asked not to be identified. While the accord marks "a start," the U.S. will expect the EU to offer further reductions in trade-distorting farm subsidies during the next round of global trade talks, the official added. For WSJ subscribers interactive.wsj.com