The BSE crisis is causing headaches for the British government, as farmers resort to direct action in protest against an estimated 40 per cent decline in their living standards this year. The farmers' protests have initially been directed against Irish beef imports to Wales and now to parts of Scotland and northern England. The announcement yesterday afternoon that the sale of beef on the bone is to be banned in Britain is a further disquieting indication that the BSE crisis continues as gravely as before, with an unwelcome impact on the Labour government's budgetary calculations.
The targeting of Irish beef exports to Britain is quite illegitimate, indeed illegal, within the well-established regime of the Common Agricultural Policy. Irish farmers' organisations are understandably furious about the policing failures which have allowed Welsh farmers board ferry vessels to examine individual containers. This is a clear violation of their responsibilities to take appropriate action to ensure that the single agricultural market proceeds unhindered.
The British government is put clearly in the line of responsibility by these events. It has been reluctant to draw down compensatory payments from Brussels to cater for the growing strength of sterling, largely because agreements reached under Mrs Thatcher on British contributions mean it is difficult or impossible to secure rebates. The cost therefore falls squarely on the British Exchequer. Faced with such a collapse of their incomes, and now by further evidence that the BSE issue will not go away, British farmers have taken to direct action normally associated with their continental colleagues.
The British government must evaluate these events within the wider framework of sterling's artificial strength, affecting many of its export industries, as well as the agricultural sector. It is unlikely to affect the government's strategy vis-a-vis the single European currency; but it must serve as a sharp reminder that there is no great comfort in standing aloof from the currencies now preparing to join the EMU regime next year, in a decision to be chaired by the United Kingdom during its forthcoming EU presidency.
Relations with Ireland, North and South, are also implicated in how these events are handled. It will be more difficult after them for the British government to plead that the beef export ban should be lifted for Northern Ireland, to be followed by Scotland and Wales. This is unfortunate, since such a flexibility would feed constructively into the Northern Ireland peace process as well as into the EU presidency.
There was a temptation, when the Labour government took office last May, to play down the agricultural issue in the hope that a quieter approach would reap policy dividends. These events show the problems will not go away. A failure to confront them squarely would also make it more difficult for Labour to pursue its longer-term policy of scaling down CAP within the EU policy priorities.