A government limit curtailing subsidies paid to beef producers in 1996 for losses arising out of the BSE disease crisis was struck down yesterday by the High Court.
Mr Justice McCracken held that discrimination by the Department of Agriculture against producers who exported live steers for slaughter outside the EU was a breach of European Community law.
Awarding a Co Roscommon farmer, Mr Hubert Maxwell, £91,575 damages for losses incurred on the export of 2,035 steers, the judge told his counsel, Mr Gerard Hogan SC, he was astonished at the lack of formality by the Department in the administration of the £13 million scheme.
Mr Justice McCracken said that in March 1996 the British Secretary for Agriculture had announced in the House of Commons that there was a possible link between BSE in cattle and Creutzfeldt-Jakob Disease in humans.
It had a catastrophic effect on the beef market throughout the European Community, particularly in Ireland. Under a BSE compensation package the European Council had provided for payments to compensate producers for losses arising from the crisis.
The EU had made no provision £50 per head on cattle marketed between March 25th and June 9th, 1996.
No restrictions had been imposed on the number of subsidy payments on live steers which had been sold for slaughter in Irish factories. Farmers who had sold their steers for slaughter outside the EU had been restricted to claiming the subsidy on a maximum of 90 animals.
A second discrimination alleged was that it appeared animals exported live would qualify only if they had been reared on the producer's farm up to March 1996 while no such restriction applied to steers sent to Irish factories.
Mr Hogan had argued that either of these discriminations constituted a breach of Article 40 (3) of the Treaty of Rome, which specifically excluded any discrimination between producers or consumers within the Community.
The State had argued that the lighter "unfinished" animal which was exported live and the fattened animal normally sent to factories for slaughter at home were two different products. Mr Justice McCracken, dismissing what he described as "a very artificial distinction indeed", held they were the same product.
He said he had no doubt that if Mr Maxwell, of Ballinagar, Castlerea, had sold his animals to the factory he would have obtained a £50 payment for each of them. He had received the payment for only 90 because he had exported them live.
The judge added that any requirement to show proof of ownership of live exports as on March 25th, 1996, clearly constituted a discrimination in that there had been no such requirement in respect of factory-slaughtered animals. This meant that persons could purchase a steer on March 30th and sell it for home slaughter the next day and be entitled to the £50.
He said he viewed the breach as a very serious one, particularly in view of the fact that the regulation had been operated retrospectively. He awarded damages on the basis of £45 per animal marketed. He accepted the Department's view that had the number of eligible animals been greater, due to an absence of a discriminatory clause, the amount of subsidy per head would have been smaller.