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EU backs farm reforms

Latest update : 2008-05-20

EU Agriculture Commissioner Mariann Fischer Boel announced plans to continue agriculture reforms, in particular by curbing subsidies to wealthier farmers and redirecting funds to rural preservation.

STRASBOURG, France, May 20  - Europe’s farm chief took aim at wealthy farmers on Tuesday, suggesting ways of gradually docking their subsidies and channelling the saved cash into schemes to enhance and preserve the countryside.

In a blueprint for revamping farm policy up to 2013, EU Agriculture Commissioner Mariann Fischer Boel wants to abolish -- or at least curtail—a string of “old-style” farm support schemes, helping farmers respond to growing demand for food.

One of the most controversial ideas in her “health check” is to trim handouts to large farms by siphoning off cash via a tiered system of income brackets into rural development schemes.

“This health check is not a fundamental new reform, but it’s simply a possibility to modernise, strengthen, simplify and streamline our Common Agricultural Policy,” Fischer Boel said.  “Crucially, it aims as well to remove remaining restrictions on farmers, allowing them to respond to the market and the growing demand for food that we see globally,” she told a news conference at the European Parliament in Strasbourg, France.

Her plan, in effect a mini-reform, would continue a policy shift away from more traditional support mechanisms, such as safety-net public purchase of commodity stocks at fixed prices, and farm subsidies that are still linked to production volumes.

Fischer Boel’s plan will now be discussed by EU farm ministers, with a view to reaching a deal in November. It is certain to be a rough ride: EU governments already have several “shopping lists” of changes they want in specific policy areas.

France, by far the largest beneficiary of farm spending—a massive support programme that eats up more than 40 percent of the EU’s entire budget—is, so far, less than convinced.

“The European Commission is being unrealistic in its proposals for the future of the CAP,” French grain and oilseed growers’ group Orama said in a statement.

“Grain markets have entered an era of high volatility so public storage and true security nets for farmers are more than ever necessary to keep an interest in producing even when prices are low,” it said, calling the proposals “incomprehensible”.


 

LARGE FARMS

The suggestion of capping the income of Europe’s largest farms has annoyed several countries, such as Britain, Germany and the Czech Republic—all with big land holders.

Farms receiving subsidies of more than 300,000 euros ($467,100) a year, for example, would see 22 percent of that siphoned into countryside-enhancing schemes by 2012.

German Agriculture Minister Horst Seehofer said in a statement he was “very critical” of that idea, which would lose German farmers more than 400 million euros of income.

Other proposals include the abolition of set-aside, which is the requirement for farmers to leave 10 percent of land fallow each year to give soil a chance to recover between crops, and also the special subsidy of 45 euros per hectare now given to farmers to grow crops for biofuels.

There will also be small annual increases in milk production quotas in a gradual market liberalisation aiming to cushion the financial pain for the EU’s dairy industry ahead of the planned abolition of the quota system in 2015.

“It’s not the time ... to micro-manage the possibilities for farmers to produce and tell them exactly what to produce. Nor can we simply, as some have been suggesting ... simply scrap the CAP,” Fischer Boel said.

That was a clear reference to recent comments from London calling for the CAP to be dismantled since it was responsible for costing consumers vastly more in higher food bills.

Date created : 2008-05-20

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