THE EUROPEAN Community has refused to fully compensate German farmers for rises in the D-Mark. Germany wants a restoration of the "switchover" system whereby each realignment of EC currencies pushes up farm prices in all member countries to follow the movement of the strongest currencies -- invariably the D-mark and the Dutch guilder.

To pressurise Bonn, Brussels has said it will reinstate the three-day adjustment system if there is no agreement on its plan to widen the margins outside which green rate revaluations of currencies are triggered. This was stopped six weeks ago under severe German pressure. Under the three-day system, the EC started adjusting national prices for farm produce every three trading days, revaluing, for instance, the "green" French franc at the expense of German and Dutch farmers.