VZCZCXRO4138
PP RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV
DE RUEHNC #0844/01 2921132
ZNR UUUUU ZZH
P 191132Z OCT 07
FM AMEMBASSY NICOSIA
TO RUEHC/SECSTATE WASHDC PRIORITY 8257
INFO RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC 0042
RUEHBS/USEU BRUSSELS
RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHAK/AMEMBASSY ANKARA 5054

UNCLAS SECTION 01 OF 03 NICOSIA 000844 
 
SIPDIS 
 
SENSITIVE 
 
AGRICULTURE FOR FAS 
 
BRUSSELS FOR FAS 
 
ATHENS FOR FAS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EAGR ECON ETRD TBIO CY
SUBJECT: CYPRUS: SCRAPIE THREATENS ISLAND'S ANIMAL HUSBANDRY AND 
DAIRY INDUSTRIES 
 
 
(U) This cable is sensitive but unclassified.  Please protect 
accordingly. 
 
¶1.  Summary.  Over the past week, Cypriot media have focused on the 
ominous implications for the local animal husbandry and dairy 
industry of a recent EU court decision calling for the culling of 
all animals infected with scrapie.  In Cyprus, this decision may 
affect up to 116,000 goats and sheep -- a quarter of Cyprus' animal 
population.  Cyprus is currently fighting the decision before the EU 
and is hoping for a postponement of the decision and a softening of 
the blow.  This being a pre-election period, this issue also has 
political ramifications.  Unless action on the court's decision is 
delayed or reversed, this problem could take points away from 
incumbent President Papadopoulos, who is hoping for re-election in 
February 2008.  End Summary. 
 
¶2.  On September 28, 2007, the European Court of Justice of the 
European Communities, following a French appeal, ordered the mass 
culling of up to 116,000 sheep and goats in Cyprus over scrapie 
fears.  The decision has sent shockwaves through Cyprus, 
particularly the farmers involved and the incumbent government, 
which is hoping for re-election in the February 2008 Presidential 
elections.  The GOC has until October 31, 2007 to implement the 
court's decision but is trying to appeal and gain more time.  If 
implemented strictly, this decision would deal a serious blow to 
Cypriot agriculture. 
 
¶3.  Scrapie belongs to a family of fatal diseases of the brain known 
as transmissible Spongiform Encephalopathies (TSEs), that include 
mad cow disease.  Scrapie itself is not transmissible to humans. 
However, there is strong evidence suggesting that the outbreak of 
mad cow disease (which is transmissible to humans) in the UK and 
elsewhere several years ago was caused by farmers feeding their 
cattle ground up remains of animal carcasses infected with scrapie. 
Cypriot cattle farmers, for their part, reportedly make a point of 
not engaging in this practice. 
 
¶4.  Scrapie in Cypriot sheep first appeared in the mid-1980s and is 
believed to have been contracted through the importation of an 
infected flock of sheep from Germany.  Cyprus has been combating the 
disease since then.  Cypriot scientists have identified the gene 
type susceptible to the disease, using this information to breed 
sheep that are resistant to the disease.  In a pioneering program, 
Cypriot animal health authorities have managed to reduce 
dramatically the rate of scrapie infection in Cypriot flocks of 
sheep, from almost 100 percent in the late Eighties to around 10 
percent currently. 
 
¶5.  Scrapie in goats, however, is a different problem.  It has been 
around in Cyprus for only about five or six years and, so far, there 
is no scientific method of telling apart sick animals from healthy 
ones nor differentiating susceptibility by genotype.  Contacts tell 
us that Cypriot animal health authorities have strong hopes of soon 
replicating their success in fighting this disease in goats as they 
have done with sheep. 
 
Impact on Agriculture and Economy 
--------------------------------- 
 
¶6.  If the court decision is implemented strictly, there is no doubt 
that Cypriot agriculture would suffer a serious blow.  To keep 
things in perspective, it should be noted that the overall impact on 
the economy at large is not likely to be catastrophic, especially 
since Cyprus is a services-based economy.  In 2006, the agricultural 
sector contributed 2.6 percent to GDP (about CP 217.7 million, USD 
530 million) and employed 6.5 percent of the economically active 
population (some 23,870 people).  Animal husbandry and the dairy 
industry are important sub-sectors of agriculture. 
 
¶7.  The 116,000 animals (83,000 goats and 33,000 sheep) that would 
have to be slaughtered make up about a quarter of the population of 
these animals in the government-controlled area (around 430,000 
animals).  Correspondingly, about 700 herds of goats and sheep would 
have to be culled out of a total of 3,500 flocks. 
 
¶8.  In strictly monetary terms, it is estimated that it will cost 
the government about CP 11.8 million (USD 28.7 million) to 
confiscate these 116,000 animals, and compensate farmers for their 
loss of income for up to five years and help them get back on their 
feet.  (Minister Photiou has already announced plans to offer 
immediate assistance of CP 900,000 and officials here assume that 
 
NICOSIA 00000844  002 OF 003 
 
 
the EU will offer generous subsidies to compensate Cyprus.) 
However, this is only the tip of the iceberg.  A mass culling of 
this scale would cause practical problems in terms of properly 
disposing of the carcasses of the dead animals, estimated to 
generate 6,500 tons of waste. 
 
¶9.  Perhaps most importantly, though, such a massive culling would 
put out of business around 700 farmers for at least two years (the 
time it takes to import new animals and rebuild the industry).  This 
would seriously disrupt the future development of animal husbandry 
on the island, since many farmers might choose another line of 
business in the meantime, never to come back to animal husbandry. 
Consequently, the disruption to the island's dairy industry for the 
domestic market as well as for exports would be enormous.  Sheep and 
goat milk are the main ingredients for making halloumi, Cyprus' most 
famous patented product.  Exports of halloumi have been thriving in 
recent years, reaching CP 17 million (USD 41.4 million) in 2006, and 
making up 6.5 percent of Cyprus' total exports.  Additional export 
sales have been limtied only because of lack of production capacity 
due to a lack of raw milk. 
 
Negotiations to Soften Blow Under Way 
------------------------------------- 
 
¶10.  Several other EU countries (including Italy, Greece, Spain, the 
UK and Ireland) are also affected by scrapie, although not to the 
same extent as Cyprus, due to the island's high proportion of goat 
and sheep farms.  However, what really sets Cyprus apart from the 
other countries with the same problem is that Cyprus has had 
considerable success in dealing with this problem in sheep over the 
years. 
 
¶11.  The GOC is trying to use this argument to convince the EU 
authorities to soften the blow on Cyprus.  Cyprus is seeking delays 
in implementing the decision, and also to restrict any culling to 
only infected animals, as opposed to entire flocks comprised of both 
healthy and sick animals.  The GOC will also argue that, despite the 
prevalence of scrapie in Cyprus for the last 20 years, no humans -- 
or animals other than goats and sheep -- have ever been affected. 
Local representatives of the dairy industry have told us that they 
are optimistic about the outcome of these negotiations. 
 
¶12.  GOC Veterinary Services have been following very strict 
procedures for slaughtering goats and sheep since July 1, 2007, 
which are even stricter than those prescribed by the Commission. 
Specifically, (a) all goats and sheep older than 12 months, even 
those without any clinical symptoms of scrapie, are tested before 
offered for public consumption.  High risk parts of the animals 
(heads, spleen, spine and intestines are removed before leaving the 
slaughterhouse).  (b) Animals younger than 12 months without 
clinical symptoms are allowed for consumption without prior testing 
but after the removal of the spleen. 
 
¶13.  Cypriot officials, led by Agriculture Minister Photiou, are 
currently negotiating intensively with EU authorities on 
ameliorating the impact on Cyprus.  There are reports that the 
European Commission is planning to appeal against the decision of 
the European Court of Justice of the European Communities.  On 
October 18, local media also reported that Marcos Kyprianou, the EU 
Health Commissioner (and by chance a Cypriot), had prepared an 
urgent regulation to postpone for five years the culling of sheep 
and goats flocks suffering from scrapie in all affected countries. 
The new regulation will be tabled before the Commission's Food 
Experts Committee, which has representatives from all 27 countries, 
and can be passed as early as this December. 
 
¶14.  Comment: The conspiracy-minded in Cyprus believe there are 
ulterior motives behind France's move to seek strict enforcement of 
the court decision.  This theory contends that this is France's way 
of promoting the interests of French cheese producers, at the 
expense of up-and-coming rivals from southern Europe, mainly Greece 
and its ability to use "feta" as a geographic indicator for brined 
white cheese.  According to one source, "the French think they will 
get back the market by denying Greeks access to any milk." 
 
¶15. Comment continued: The meat and milk of sheep/goats may be a 
relatively minor factor from a macroeconomic view. But for Cypriots, 
the Sunday "souvla" (lamb roast) and halloumi cheese for breakfast, 
lunch or appetizer are cultural icons on par with hot dogs and apple 
pie for the average American.  If the price of the Cypriot cultural 
identifiers goes too high, it would be a major risk for any 
 
NICOSIA 00000844  003 OF 003 
 
 
government here regardless of the underlying cause. This is 
especially true with Presidential elections only a few months away. 
 
 
SCHLICHER