The EU executive adopted plans Nov. 18 that will force farmers to do more to protect the environment in order to justify public subsidies, despite farm unions warning that could threaten their economic viability.
In a policy paper on reforming the EU’s common agricultural policy (CAP) from 2013, the European Commission said linking direct subsidies – currently worth about 40 billion euros ($54 billion) a year – to new “green” objectives would help justify the costly policy to EU taxpayers.
“The CAP has never been so close to a crisis of legitimacy as it is today,” EU Agriculture Commissioner Dacian Ciolos told EU lawmakers in Brussels. “This is an opportune moment to refocus (the CAP) in line with the expectations of society.”
But EU farmers’ union Copa- Cogeca said the commission’s focus on “greening” the CAP risked undermining EU food production by increasing farmers’ costs.
“The only concrete proposal in the paper is to add more costly (environmental) burdens on to EU farmers,” said Copa president Padraig Walshe. “Increasing costs lowers incomes and will have a devastating effect on production,” he told a news conference in Brussels.
The commission will present its plans to EU farm ministers on Nov. 29, with a formal response from EU governments expected early next year ahead of the commission’s legislative reform proposals due in July.
France’s Farm Minister Bruno Le Maire said many of the ideas floated in the paper reflected a joint Franco-German position on the CAP reform agreed in September.
German Farm Minister Ilse Aigner called the paper “a good basis for further negotiations on a national and European level.”
Britain would have liked to see a greater recognition in the paper of the fiscal and economic challenges facing the EU, a diplomatic source said Nov. 18, referring to the deep cuts in public spending being made by many EU governments.
“Whilst recent reforms to the CAP reflect the right direction of travel, this needs to be accelerated, promoting greater competitiveness (and) efficient use of taxpayer resources” a British government spokesman said.
Environmental groups gave the paper a cautious welcome, with Friends of the Earth calling it a “long-awaited step towards a more people-and planet-friendly food and agriculture policy.”
BUDGET QUESTIONS REMAIN
Lawmakers in the European Parliament – which will have an equal say in the reform with EU governments – criticized the paper for its lack of detailed proposals.
The most glaring lack of detail was on the future size of the CAP budget, currently worth about 55 billion euro ($74 billion) a year.
The EU executive is due to publish proposals for the bloc’s next long-term budget from 2014-20 early next year. Few expect drastic cuts in farm spending, though many believe the commission will try to reduce CAP spending to fund new priorities.
France, Spain and other traditionally pro-CAP governments have pledged to resist any moves to cut the CAP budget, pitting them against Britain, Sweden and others who want to limit EU spending and refocus it on economic growth and innovation.
LIMITING PRICE VOLATILITY
Other proposals floated in the paper include limiting the level of direct subsidies paid to individual farms, and ensuring that only active famers are eligible for EU subsidies.
But Germany’s Aigner said a limit on direct subsidies to individual farms was “not in the interests of German agriculture,” given the high number of large farms in the economically weak east German regions.
The commission also called for a fairer distribution of subsidies between old and new member states, with direct aid currently varying from more than 500 euros ($674.9) per hectare in Greece to less than 100 euros in Latvia.
The paper ruled out an EU-wide flat-rate subsidy, but said farmers in all countries could receive a minimum percentage of the EU average rate – currently about 250 euros per hectare.
Le Maire said France would oppose any bid to weaken direct subsidies, while Germany’s Aigner said any redistribution must be limited and phased, and was dependent on the overall size of the future EU budget.