Mad cow crisis leaves carcass backlog

By Douglas Herbert, CNN.com Europe writer

LONDON, England (CNN) -- Slaughterhouses across Europe face a mounting backlog of cattle remains as the region struggles to cope with mad cow disease.

Efforts to check the spread of tainted cattle are costing Europe billions of dollars, as countries from Spain to Ireland confront growing mounds of carcasses slated for cremation.

The backlog -- measured in tons of ground-up meat-and-bone meal that look nothing like cattle -- comes amid tough new EU rules that require testing of all cattle over 30 months destined for the human food chain. (In Britain, nearly all cattle over 30 months are banned for human consumption.)

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The European Union's testing scheme, in effect since January 1, aims to restore consumer confidence in beef by testing older slaughtered cattle for the fatal brain-wasting disease known as bovine spongiform encephalopathy, or BSE.

Older cattle that are not tested under the scheme must be destroyed. Because many countries lack the resources to conduct expeditious tests -- which are only partially paid for by the EU -- slaughterhouses are stretched to the breaking point in some areas.

Britain, where BSE began, has destroyed nearly 5 million cows under its own five-year programme. Every week, 20,000 cows are removed from farmers' stocks, slaughtered and separated into their two basic elements: meat-and-bone meal, and fat.

Most of this material is directly incinerated; the rest is part of a UK backlog of almost half a million tons of material waiting to be burned.

As BSE spreads across Europe, the crisis is also becoming a financial albatross for member states.

Cost of destruction

Many governments are overwhelmed by the sudden outbreak in their own countries of a disease that, until recently, had been considered a British scourge. In Spain, cows were recently found dumped in a strip mine in Galicia -- an indication the country lacks storage space for the backlog of carcasses waiting to be destroyed.

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COPA, a pan-European farmers lobby, estimates the mad cow crisis could cost Europe 4 billion to 5 billion euros ($3.7 billion to $4.7 billion) a year. That estimate includes lost revenues from meat sales, as well as subsidies that governments and the EU pay under an EU purchase-for-destruction scheme.

The EU has adopted a two-pronged strategy to the mad-cow crisis: it helps governments compensate farmers, at market rates, for each animal destroyed, and it also covers a small portion of the costs for the kits needed to test animals for BSE.

In the purchase-for-destruction scheme, the EU pays 70 percent of compensation to farmers, with member states paying the remainder. (In Britain, for instance, about �1.6 billion -- $2.3 billion -- in such compensation has been paid).

But the EU only covers about a fifth of the cost of the testing kits -- passing on the balance of testing costs to meatpackers or member governments.

That policy has opened Brussels to criticism that it set up a testing scheme without laying out clear guidelines on how to pay for it.

Costa Golfidis, director of COPA, said that in the absence of a uniform policy on test payments, he fears farmers and meatpackers in some countries may get an unfair advantage.

Earlier this month, France decided to levy a special franc-per-kilogram (14 cents-per-kilogram) tax on beef -- a move that may help nudge the EU towards a resolution. The tax marked the first time an EU member state has tried to pass on the costs of the mad cow crisis to consumers.

In France, a BSE test costs an estimated 500 francs ($72) per animal, of which the EU pays about 100 francs ($14). Until now, meatpackers have covered the balance, which is mounting: Since January 1, France has conducted 25,000 tests under the EU scheme, according to the French Ministry of Agriculture. Officials say the tax should help pay for the tests.

The cost to the German economy of the BSE crisis could be at least 1.6 billion marks ($765 million), according to a government report cited in a recent German newspaper.

That sum includes the planned slaughter of 400,000 cattle under EU rules, the testing of older cows and those that died of natural causes, and the disposal of animal feed containing banned meat-and-bone meal.

But the figure does not include the possible cost of compensating farmers for lost revenues because of plunging beef consumption and price depreciation.

The Associated Press & Reuters contributed to this report.