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Fault Lines Run Deep As EU Farm Policy Talks Heat Up

An “offensive strategy” by France to take the lead in shaping a reform of European Union farm policy may not be enough to shield French farmers from the far-reaching changes sought by other member states.

The 27-nation bloc plans to overhaul its complex Common Agricultural Policy (CAP), which often provokes fierce arguments, and wants to simplify the system by removing some of its inequalities.

Negotiations over farm policy and the budget that goes with it will coincide with haggling over the bloc’s overall 2014 to 2020 budget, worth some 125 billion euros (US$184 billion) annually.

Agriculture makes up about 40 per cent of the budget. French farmers are the biggest benef iciar ies, having taken about 20 per cent of the 39.6-billion-EU farm budget in 2009, and they could lose in the redistribution.

RECESSION PRESSURES

Emerging from the worst recession since the Second World War, Britain, the Netherlands, Denmark and Sweden are pushing to rein in public spending and cut the farm budget to focus on areas such as climate change, innovation and research and development.

“Our position has been very clear. What we are looking for is a fundamental revision of the pillar on spending which would lead to the phase-out and final abolition of the law on spending between 2015 and 2020,” a British official said.

Britain is also under pressure to give up an annual rebate of about two billion to three billion euros from its EU budget contribution. Margaret Thatcher, Britain’s then prime minister, negotiated the claw-back in 1984, angry at the size of France’s farm subsidies.

This sets the stage for a fight pitting Britain against France, which is backed by others such as Poland, Italy, Spain and Greece, whose farmers are the biggest beneficiaries of subsidies and want to maintain or increase agriculture spending.

OFFENSIVE STRATEGY

French President Nicolas Sarkozy, in anticipation of the reforms, urged France this year to embark on an “offensive strategy” with others, to lead the envisaged changes “instead of waiting quietly until disaster strikes in 2013.”

Discussions have begun in earnest in European capitals on the future of agricultural pol icy and France, which seeks more regulated legislation to protect farmers, gathered 22 EU states in Paris last Thursday to seek a common strategy.

Notably absent from the meeting were Britain, the Netherlands, Denmark and Sweden, which favour market-oriented reform and want the costly single farm payments – an annual handout to landowners – scrapped or phased out.

CONSENSUS

There is a growing consensus that any new farm policy should tackle disparities in direct farm payments and focus on efforts for the public good such as fighting climate change, protecting biodiversity, developing renewable energy and innovation.

“We should be very clear that this new policy is seen to be doing that (improving the public good), not just giving income to the farmers,” said Paolo De Castro, a former Italian farm minister who chairs the European Parliament’s agriculture committee.

It is vital for the French government that the farmers, whose already large political clout has increased because France faces regional elections, perceive France as leading the reform initiatives and protecting their interests.

But some experts say that despite what looked like a consensus among the so-called G-22, differences over issues such as allocations for the budget will prove fractious.

EQUITABLE DISTRIBUTION

Eastern European countries that recently joined the EU and form a significant minority are, for example, demanding an equitable distribution of farm payments.

Subsidies range widely throughout the EU. Greek farmers receive nearly 600 euros per hectare of arable land, whereas for Latvia’s farmers the sum is about 80 euros.

“I think the idea of G-22 coherence is largely superficial,” an EU diplomat said.

However, some say the French side has received a boost from the nomination of former Romanian farm minister Dacian Ciolos as EU agriculture commissioner and Polish economist Janusz Lewandowski to be in charge of the EU’s budget. Both are seen as likely to be French allies.

The EU’s executive European Commission, which manages the bloc’s farm policy and expected to submit a draft proposal by autumn next year, had acknowledged it would be difficult to maintain some of the historic benefits that farmers enjoy.

“The days of heavy, detailed market management are over,” current EU Agriculture Commissioner Marianne Fischer Boel warned in November.

“That approach served a purpose in its time, but it was inefficient at supporting farmers’ incomes, and it had negative side-effects,” she said.

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