AMBASSADOR'S MEETING WITH AGRICULTURE MINISTER

UNCLAS SECTION 01 OF 02 VIENNA 000867

SIPDIS

SIPDIS, SENSITIVE

E.O. 12958: N/A
TAGS: EAGR ETRD WTO TBIO KFLU AU
SUBJECT: AMBASSADOR'S MEETING WITH AGRICULTURE MINISTER
PROELL


Summary
--------------


1. (SBU) During Ambassador McCaw's March 6 introductory
call on Austrian Minister of Agriculture and Environment
Josef Proell, Proell called for additional progress on NAMA
and services in the WTO negotiations, before the EU would
make concessions on agricultural market access. Proell
touted the April 4-6 Coexistence Conference, hosted by the
European Commission and his ministry, as a starting point
for developing EU-wide rules on coexistence. Given
differing opinions between many member state researchers and
the European Food Safety Agency (EFSA),Proell maintained
that EFSA should work towards a common EU view on particular
GMOs. Proell admitted that Austria might eventually have to
give up its national GMO prohibitions in light of the
anticipated WTO ruling against the EU. However, with
national elections due this fall, Proell predicted there
would be no movement on this issue until after the
elections. According to Proell, the appearance of avian flu
in Austria has cut poultry production by 20 percent for many
farmers and poultry consumption by 40 percent. Proell
highlighted Austria's efforts to increase the percentage of
bio-fuels in the overall fuel mix from three percent to 7-8
percent in the next several years. End summary


WTO Negotiations
--------------


2. (SBU) During a March 6 meeting with Ambassador McCaw,
Minister of Agriculture and Environment Josef Proell
reiterated the GoA position that negotiators need to make
progress on NAMA and services before the EU can make
concessions on agricultural market access. Proell conceded
negotiations will be difficult. Proell candidly admitted
that Austrian farmers cannot compete with U.S., Brazilian,
or even Hungarian and Czech farmers. According to Proell,
the average Austrian farm is 16 hectares and 70 percent of
farmers live in mountainous areas. Proell claimed that,
without subsidies, most Austrian farmers would go out of
business. Regarding the EU's agricultural spending, Proell
insisted that the figures are misleading: although
agricultural spending represents 40 percent of the EU's
budget, this is only two percent of the member states' total
budgets.


Biotechnology
--------------


3. (SBU) Proell pointed out that approximately 700
scientists, farmers and government officials will attend the
April 4-6 Coexistence Conference sponsored by the European
Commission and the Ministry of Agriculture and Environment.
Proell said he views the conference as a starting point for
the EU to develop common coexistence rules, although he
conceded that the actual formulation of common rules will
not occur during the Austrian Presidency.


4. (SBU) Proell reiterated his desire to maintain GMO-free
zones for crop cultivation in Austria. Proell noted that
Austrian dairy farms import grains from Argentina and
Brazil, estimating that 70 percent of these imports are
GMOs. Proell stressed that what Austrians really opposed
was planting biotech seeds.


5. (SBU) Proell emphasized that disagreements among
scientists on the evidence is the main reason why Austria
opposes biotechnology. He said the European Food Safety
Agency (EFSA) should encourage the multitude of researchers
to develop a common EU view on particular crops. Proell
added that differences of opinion between EFSA and member
state researchers complicate the process. The GoA will
present further ideas on this subject to the EU
Environmental Council.


6. (SBU) Commenting on the anticipated WTO decision against
the EU moratorium on new approvals, Proell conceded that
Austria might ultimately have to give up its national GMO
prohibitions. However, he stressed that the GoA would stand
pat until the WTO issues its final report. Proell added
that the GoA would most probably not move to modify its
current system until after national elections this autumn.


Avian Flu
--------------


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7. (SBU) Noting that the Ministry of Health has the GoA
lead on avian flu, Proell opined that an outbreak might have
serious political consequences, if there is a perception
that the government is mishandling the issue. Currently,
farmers must house poultry indoors until mid-April.
According to Proell, this requirement is problematic,
because farmers had been encouraged not to house poultry
under new EU animal welfare legislation. This decision has
imposed huge financial costs on poultry farmers. Many
farmers have lost 20 percent of their production and the
industry is suffering from a 40 percent decline in poultry
consumption. Proell said the GoA is considering subsidizing
the farmers for these losses.


Bio-fuels
--------------


8. (SBU) Proell noted that Austria will open a new bio-
ethanol plant in 2006. Three percent of Austrian fuels are
already bio-diesel. Proell expects that over the next
several years the bio-diesel percentage will rise to 7-8
percent. Asked whether Austria might use biotech crops for
bio-fuels, Proell admitted that it would be an easier
concept to sell to the Austrian public than biotech foods
for human consumption. Nonetheless, Proell repeated that it
would be critical to address the coexistence issue.

MCCAW