Agriculture ministers from the 25 European Union member states agreed unanimously this week that the EU should fund 50 per cent of the compensation offered to poultry farmers under a new Commission regulation on market support measures.
Bird flu has now been detected in 13 EU member states, including on domestic poultry farms in France and Germany. Consumer concerns about eating infected birds have led to 300,000 tonnes of poultry in storage across the bloc.
The growing problem has led to calls for more government compensation for the poultry sector.
A European Commission regulation on market support, now agreed by ministers, commits the EU to funding half the cost of veterinary measures, such as slaughtering chickens, and half the cost of restrictions on animal movement resulting from a nearby bird flu outbreak.
And, agriculture ministers agreed that the Commission should also extend this to take into account "serious market disturbances directly attributed to a loss in consumer confidence due to public health, or animal health risks".
This means poultry processors and farmers could also get compensation for falling sales, amid public concern over bid flu.
The compensation agreement, however, is unlikely to please everyone. The European Parliament, some countries in the south of the EU and some new members states had said they wanted 100 per cent compensation from the EU's bank account.
With the recent spread of avian influenza throughout the European Union, consumer demand for eggs and poultry meat has declined sharply. In some countries, such as Italy, demand has fallen by up to 70 per cent, drastically lowering poultry farmers' incomes.
The UN Food and Agriculture Organisation (FAO) reported that recent avian influenza outbreaks in Europe, the Middle East and Africa have caused dramatic swings in poultry consumption, increased trade bans and sharp price declines. The UN agency expects poultry consumption shocks this year in many countries.
"A steady erosion of previously expected gains in per caput poultry consumption will likely push down global poultry consumption in 2006, currently estimated at 81.8 million tonnes, nearly three million tonnes lower than the previous 2006 estimate of 84.6 million tonnes," stated FAO commodity specialist Nancy Morgan.