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EC butter scandal continues

28th October 2005

In the late 1990s there was some consternation that the European Commission's figures for butter production and consumption were misrepresenting the real situation.

The European Court of Auditors was particularly anxious that Common Agricultural Policy (CAP) money was being wasted, and its investigation, published in 2000, showed there was considerable overproduction being encouraged by CAP support measures.

The court was unhappy about the disposal measures for surplus butter, which effectively supported excess production while providing cheap ingredients for food manufacturers.

Foxs crunch biscuitsButtery biscuits: Around half a million tonnes of subsidised butter and cream go into processed foods like these biscuits every year.

There was a clear market failure. While consumers were being urged by health professionals to cut their consumption of fatty foods, especially those rich in saturated fats (and butter is about as rich as it comes), the Commission was not only supporting over-production, but was actively subsidising the surplus butter by selling it to industry at below-market costs. The industry happily pumped the extra butter into our food supply in the form of cakes, pastries, biscuits, ice cream and desserts.

This is now history, surely? Well, no, it isn't.

We have taken a look at the agricultural figures for the last half decade and found that the situation remains as bad as ever it was.

Consumers have reduced their purchases of butter to the lowest levels yet, but the EC's intervention purchases have been steadily rising.

In 2003 (the latest published figures) consumers bought 1.2m tonnes of butter at normal prices, while the EC purchased into intervention another 0.53m tonnes. The total being bought by the EC now amounts to nearly a third of all butter produced.

And while some of the intervention butter is given to welfare schemes and non-profit bodies for lucky pensioners, hospital patients and school children to be dosed up with saturated fat the greatest amount by far is sold off to food processors. The latest figures show a record 490,000 tonnes of butter (and cream) being sold off, some 92% of the surplus.

Milk production has become an intensive industry, requiring large amounts of home-grown and imported fodder, which in turn require large areas of land, water, pesticides and fuel. The ecological 'footprint' of butter is especially high: the footprint of resources needed to produce a tonne of vegetables is less than one hectare, a tonne of milk needs between one and two hectares, a tonne of meat some 20 hectares, but a tonne of butter some 30 hectares.

Cutting the butter surplus could reduce Europe's agricultural footprint by a massive 15 million hectares about half of France's agricultural land.

Butter graphButter trends 1998-2003 (% of total consumption) showing normal butter purchases (consumers), butter subsidised for social use (social) and butter sold cheaply to companies (industry)

Useful resources

Source: The Agricultural Year 2004, European Commission, 2005.