Larger farms face five per cent EU subsidy cut for 2013

Reuters / Farmers who receive more than 5,000 euros a year in European Union subsidies will see payments above that level cut by five per cent this year, to bring farm spending in line with proposed EU budget cuts.

The European Commission will propose the move after its forecasts showed that farm subsidies for 2013, which will be paid out from the 2014 budget, are set to exceed the limit agreed by leaders at an EU budget summit in February.

EU sources familiar with the commission proposal said that by exempting the first 5,000 euros paid to farmers, the reduction will only affect the 20 per cent of farms in Europe that currently receive more than that each year.

That could prompt opposition from countries with a higher proportion of large farms, including top common agricultural policy (CAP) recipient France, as well as Germany and Britain.

“Exempting farmers under 5,000 euros discriminates against bigger farm sizes in the U.K. That is unfair,” Scottish Liberal Democrat MEP George Lyon said in a message on Twitter.

The reduction will apply to farmers in all EU countries except Bulgaria, Romania and future member Croatia, where CAP payments are being phased in gradually.

The reduction will trim about 1.5 billion euros from the projected farm subsidy bill, bringing it into line with the reduced budget of 41.5 billion euros for direct payments in 2014 agreed by leaders last month.

In separate talks on reform of the CAP from 2014 onwards, EU governments have argued that only the first 2,000 euros of payments should be exempt from similar reductions in the future.

EU governments and the European Parliament will have until the end of June to agree to the commission proposal.

If lawmakers cannot agree by that deadline, the commission will be free to adopt its own proposals.

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