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Business Europe

EU ministers reach compromise on farm reform

Text by REUTERS

Latest update : 2008-11-20

After a marathon negotiating session, EU farm ministers have come to a compromise on reform of the Common Agricultural Policy (CAP), notably with a reduction in subsidies for farmers. The changes will take effect from 2009 to 2013.

European Union farm ministers agreed on Thursday to sweep away various established agriculture support schemes, including diverting subsidies from large farms to countryside preservation schemes, an EU official said.

After concessions given by EU Agriculture Commissioner Mariann Fischer Boel, most notably to France, Germany and Italy, ministers struck an early-morning deal that still represents Europe's most significant farm reform in five years.

The policy revisions will start in 2009 and run until 2013.

"It was a qualified majority, not unanimity," said the official, who did not say which country or countries in the 27-nation bloc had not backed the accord during all-night talks.

Apart from arguing over how much to divert handouts into countryside funding, the main hurdles were how to liberalise the EU dairy sector before milk production quotas expire in 2015, public purchasing of key commodities like wheat and the future of the EU's remaining production-linked farm subsidies.

All holdings, subject to a basic threshold of 5,000 euros ($6,312) in subsidies a year, will shift 5 percent of their EU farm money into countryside projects by 2012 -- Fischer Boel had wanted 8 percent -- on top of a compulsory 5 percent already in force.

Much of her vision of applying a tiered system of annual income thresholds to shunt subsidies, in progressively higher amounts, from larger farms into rural spending also got diluted.

Instead of three thresholds for farms receiving subsidies, only one will now apply -- 300,000 euros and higher, where 4 percent of subsidies will be moved into rural projects by 2012.

Date created : 2008-11-20

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