Cull to start as cost hits pounds 105m

A decision on how to dispose of up to 15,000 culled cows a week is expected later today as figures reveal that the beef crisis has cost the industry at least pounds 105m in the three weeks since the announcement of a possible link between bovine spongiform encephalopathy and Creutzfeldt Jakob disease.

The Ministry of Agriculture, Fisheries and Food said last night that the destruction of older cows could begin within a few weeks following the meeting of the beef management committee in Brussels this morning.

Officials are expected to thrash out an agreement on the phased disposal of all dairy cattle over 30 months.

The Government has faced a major headache over implementing the scheme after the agriculture minister, Douglas Hogg, proposed the destruction of around 4.5 million cattle to the European Union last week in an effort to overturn the export ban on British beef.

Yesterday the French newspaper Le Monde published details from an exchange of letters between EU and British vetinary officials. The paper alleged the British government was last May seeking pounds 208m to fund the eradiction of BSE infected herds.

However, last night a MAFF spokesman said the figure of pounds 208m was "rubbish" and that through "usual channels" Britain had merely been seeking EU money for the pounds 125m that has already been spent since 1988 on the "slaughter and compensation" programme of cattle suspected of being BSE infected. MAFF said that only pounds 10m was applied for. That could have meant the EU accepting financial responsibility for future slaughter programmes. No explanation was given as to why MAFF had waited seven years before asking for EU intervention.

Farmers in Britain are to be compensated at 85p a kilo plus a possible top-up payment. The cost is expected to reach pounds 3.7m over six years.

Since the proposal was first mooted it has emerged that the nine incinerators licensed to destroy cattle could only cope with 3,000 cows a week. Building a new incinerator costs about pounds 1m and would take a year to be operative.

The Government will remain under pressure from Brussels to order the selective slaughter of herds, which farmers hope to avoid. Mr Hogg has until the end of the month to produce his proposals - the earliest date for consideration of removing the beef ban entirely.

A source close to the negotiations disclosed that the Government is pushing for a compromise under which only herds with a high proportion of BSE cases will be culled.

The Meat and Livestock Commission confirmed the domestic beef trade lost around pounds 75m in the past three weeks. The export industry, at a complete standstill, has lost pounds 30m.

Half of the 15,000 abattoir workers have been laid off and jobs have gone throughout the industry which employs around 500,000. However, beef sales have been recovering.

Only 771 prime beef cattle were sold in the week ending 30 March, nearly a 97 per cent drop on the same period last year. Prices had fallen to 98p from 124p per live kilo in 1995. Only 42 cull cows - dairy herd sold at the end of their useful life - were sold in the last week of March compared with 8,305 in the same period a year ago, with a drop in value per live kilo from 92p to 67p.

Supermarkets yesterday reported beef sales returning to pre-scare levels. A Meat and Livestock Commission spokesman said: "It is very patchy but the auction markets are slowly coming back to life."

But farmers are frustrated with the Government's handling of the crisis. National Farmers' Union policy director, Richard MacDonald, said there was already a backlog of up to 100,000 cattle waiting to be culled. "We have no idea how many farmers could go bust but at the moment there is a lot of money outstanding," he said.