A Continental Casualty

;Not a single case of foot-and-mouth disease has been confirmed on the Continent. Yet the slaughter has already begun. Last week France started killing 50,000 sheep that may, or may not, have come in contact with the virus. Sanitary "national defense" units were mobilized throughout the country to react immediately should a case be detected. In Calais, Eurotunnel officials forced cars arriving from Britain to drive through a disinfectant. In Portugal, British tourists were politely asked to take off their shoes for cleaning. Europe's farmers can be reassured in the short term by these measures, but if foot-and-mouth makes it to the Continent, it would be disastrous. And not just for farmers, but for one of the pillars of European unity: the common agricultural policy or CAP.

Since its creation in 1962, the CAP has managed the European Community's agricultural budget. At Euro 42.8 billion, it's half of the total EU budget. The CAP doles out subsidies and bails out farmers during crises. It has in the past, anyway. Now the effects of mad cow have drained Euro 971 million from CAP reserves. Every percentage-point drop in beef represents an additional Euro 215 million in lost revenues to farmers. "Our pockets are empty," says Gregor Kreuzhuber, spokesman for EU Agriculture Minister Franz Fischler.

Europe's politicians, desperate to protect their own, are going their separate ways. Bucking EU regulations, France last week authorized Euro 215 million to go directly to suffering farmers. In Italy, regional authorities allocated Euro 38 million to farmers last January. Agreements reached in Berlin in 1999 and Nice last December to cap the amount member states pay their farmers are being thrown out the window. "We're in the process of renationalizing our agricultural policies," says Alain Blandin, former director of France's Sanitary Defense Group. "It goes against everything we've worked toward for the last 30 years."

In the past, disagreements over how best to allocate subsidies were successfully dealt with by the CAP. But the threat of a widespread foot-and-mouth crisis has highlighted how that might all change. A meeting of agricultural ministers in Brussels last week to decide what to do with untested meat ended in disaster. EU Agriculture Minister Fischler proposed a seven-point plan, including measures to promote less-intensive farming, tighter environmental controls and stricter quotas on beef. But tempers flared. The Germans accused the French of watering down EU proposals on things like stricter environmental rules and caps on aid to big farms. And the French balked at Fischler's suggestion that the CAP undergo a "midterm review" in 2002, instead of waiting till the next round of member negotiations in 2006. Observers say the issue touches at the heart of Europe. "Agriculture is the backbone of the European Union," says Dutch Agriculture Minister Jan Brinkhorst. "If the [French and Germans] don't agree, we have a European crisis at hand."

It could get worse. Fears about foot-and-mouth are unlikely to restore consumer confidence, a requisite for raising meat consumption and farmers' incomes--and relieving the CAP. In fact, if the plague spreads, farmers will demand millions more in relief. The big question is, where will the money come from--and how will European unity weather the storm?

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