US embassy cable - 02ROME79

UNCLAS ROME 000079 
 
SIPDIS 
 
STATE PASS USDA FOR FAS/CMP/DLP/RWENTZEL 
CMPGFD/RIEMENSCHNEIDER; CMP/COT/LBLUM 
ITP/EAMED/MACE/RICHEY 
OFSTS/LHARBERT/APHIS/ATORRES 
STATE PAS USTR 
BRUSSELS ALSO FOR USEU 
GENEVA FOR USTR,ALSO AGRICULTURE 
MILAN FOR PRINCIPAL OFFICER'FLORNCE FO 
PRINCIPAL OFFICER 
NAPLES FOR PRINCIPALOFFICER 
 
E.O. 12958: N/A 
TAGS: EAGR, ETRD, EU, IT, AGR, FAO 
SUBJECT:  PROPOSED TAX ON BEEF 
VANISES AND JAPANESE INVESTIGATION OF 
ITALIAN MEAT AN BONE MEAL APPEARS 
 
REF: ROME 00607 
 
1.  ON FEBUARY 15 AGRICULTURE MINISTER 
ALEMANNO PROPOSED ATAX ON BEEF TO FUND NEW 
MEASURES TO ENSURE MEAT AFETY. ACCORDING TO 
ALEMANNO THIS TAX WOULD INCRASE GOVERNMENT 
REVENUE BY 67 MILLION EUROS AND B USED TO 
AUGMENT FUNDS PRESENTLY EARMARKED FOR TH BSE 
CRISIS.  THIS TARGET WAS CALCULATED UNDER TE 
ASSUMPTIONS OF CURRENT LEVELS OF CONSUMPTION 
AND A TAX FIXED AT 5 CENTS PER KG.  THE 
MINISTER'S SCHEME WAS PROPOSED AS CONSUMERS 
REACTED WITH ALARM TO THE DISCOVERY ON 
FEBRUARY 5 OF ITALY'S FIRST CASE OF THE 
HUMAN VERSION OF MAD COW DISEASE (REFTEL). 
 
2.  ITALIAN FARMER ORGANIZATIONS 
CONFAGRICOLTURA, CONFEDERAZIONE ITALIANA 
AGRICOLTORI, AND THE ITALIAN MEAT INDUSTRY 
ASSOCIATION ASSOCARNI SUPPORTED THE SCHEME 
BECAUSE THEY CONSIDERED THIS TAX A 
CONTRIBUTION BY RETAILERS AND CONSUMERS TO 
FOOD SAFETY COSTS. ACCORDING TO 
CONFAGRICOLTURA A SIMILAR TAX ALREADY 
OPERATES IN FRANCE.  A NEGATIVE REACTION CAME 
FROM ITALY'S OTHER MAJOR FARMER ORGANIZATION, 
COLDIRETTI, AND ALL CONSUMER ASSOCIATIONS WHO 
OPPOSED PAYING EXTRA FOR A SERVICE THEY 
BELIEVE GOVERNMENT SHOULD ALREADY PROVIDE. ON 
FEBRUARY 10 MINISTER OF HEALTH SIRCHIA WAS 
REPORTED TO ENDORSE THE PLAN, BUT BY THE 
FOLLOWING WEEK HE PANNED THE TAX. 
 
3.  IN ORDER TO ARRANGE AN AGREEMENT ON THE 
ISSUE ON FEB. 13 MINISTER ALEMANNO MET WITH 
ALL FARMER, INDUSTRY AND CONSUMER 
ASSOCIATIONS. THIS MEETING CANCELED THE TAX 
FOR 2002, PROMISED THAT GOVERNMENT WOULD PICK 
UP COSTS FOR COLLECTING AND DISPOSING OF 
"SPECIFIED RISK MATERIALS" OR BYPRODUCTS OF 
SLAUGHTER FACILITIES WHICH MIGHT TRANSMIT 
BSE, AND MADE SEVERAL PROMISES, INCLUDING 
REVISITING THE IDEA OF A TAX IN 2003.  A FEW 
CONSUMER ASSOCIATIONS NEVERTHELESS VOWED TO 
BOYCOTT BEEF TO PRESSURE INDUSTRY TO GIVE 
THEM MORE ASSURANCES ON MEAT SAFETY, BUT 
WITHOUT ADDITIONAL COST TO CONSUMERS. 
 
4.  ALEMANNO'S PLAN CONTAINS THE FOLLOWING 
ITEMS (UNOFFICIAL EMBASSY TRANSLATION): 
1- THE GOVERNMENT WILL FUND THE COLLECTION 
AND DESTRUCTION OF MEAT AND BONE MEAL (MBM) 
AND SPECIFIED RISK MATERIALS ( SRMS) THROUGH 
THE END OF 2002. 
2- THE GOVERNMENT WILL INVESTIGATE NEW 
PROGRAMS FOR THE USE OF SRMS AS ORGANIC 
MATERIAL FOR ENERGY PRODUCTION. 
3- THERE WILL BE INCREASED CONTROLS ON 
ILLEGAL SLAUGHTERING AND ILLEGAL MEAT AND 
BONE MEAL (MBM) USE  IN ORDER TO BUILD 
CONSUMER CONFIDENCE.  ESTABLISH TRAINING 
COURSES FOR OFFICERS WORKING IN 
SLAUGHTERHOUSES.  SET A MARKET REVIEWING 
AGENCY TO PREVENT SPECULATION ON PRICES. 
4- ESTABLISH A BOVINE DATA BASE BY JUNE 2002. 
5- STUDY A WAY TO SHARE THE COSTS OF THIS 
PLAN THROUGHOUT THE MEAT PRODUCTION, SUPPLY 
AND DISTRIBUTION SYSTEM IN 2003. 
 
5.  INTERNATIONAL PRESS REPORTS ON FEBRUARY 
13 REVEAL THAT JAPAN'S INVESTIGATION INTO ITS 
OWN OUTBREAK OF BSE HAVE LEAD THE GOJ TO 
SOURCES OF CATTLE FEED INCLUDING ITALIAN 
SALES OF MEAT AND BONE MEAL MADE IN 1998. THE 
GOJ HAS ASKED THE GOI FOR AN EXPLANATION OF 
WHY IN 1998 ITALIAN MBM WAS NOT STEAM.