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EU Reforms Farm Aid: One Big Budget, Many Interests

, by Sarah Dejaegher

EU officials have presented a proposal on the reform of the EU farm subsidies for the period post-2013. The EU will not cut the budget, but change its priorities and promote eco-friendly methods in agriculture.

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Today agriculture may seem as a minor issue compared to the ongoing financial crisis or foreign affairs policy. However, the EU’s farm aid, called the Common Agricultural Policy (CAP), is the oldest, most expensive and one of the most controversial EU policies. Regardless of the fact that its importance declined over the last decennia, it still remains one of the EU’s core competences.

Old

Agriculture is one of the flagship areas of the European cooperation since the early days of the European integration. It is our only truly common supranational policy, where most responsibilities have been transferred from the member states to the EU.

Expensive

The farm aid takes the biggest bite out of the EU’s funds. In 2010, it absorbed 47% of the whole EU budget. Nevertheless, its share is declining: in 1984 it was 71% and in 2014 the CAP’s share will further fall to 33%.

Controversial

Today CAP is considered to be a controversial policy, primarily due to its big budget.

It subsidizes one specific economic group – farmers – that everyone has to finance. However, this group is not even big i.e. about 5% of Europeans work on a farm, and the sector is responsible for only 1-2% of the Europe’s GDP. Furthermore, this group is rapidly shrinking, especially among young people who are less and less willing to become farmers. Having in mind that only a smaller number of the EU citizens live in rural areas, it is clear that the farm aid only serves few Europeans.

The CAP also divides Europe in many ways. Firstly, there is a division between ‘rural’ countries as opposed to ‘industrialized’ countries. The rural countries are further fragmented according to production methods and the size of the farm. Then there are the disagreements between old and new member states as regards the division of funds. Finally, while many activists want more sustainable measures in agriculture, others see the needs of third world farmers more as a priority. As a result of these contrasting interests, the political stakes are high when it comes to deciding on the CAP.

New CAP: same budget, different priorities

The proposal keeps the EUs agricultural budget till 2020, though it may be reduced by inflation. The EU farm chief Dacian Cioloş proposed the development of a coherent policy, with 6 priorities as framework:

• Encourage innovation; • Increase farmers’ competitiveness; • Manage risk; • Encourage effective use of resources; • Preserve eco –systems; • Promote social inclusion.

‘Green’ shift

Cioloş wants to see a shift towards the use of more environmentally friendly practices into everyday farming. He proposed to make 30% of the CAPs direct payments conditional on three measures: • Obliging farmers to grow at least three different crops, with none exceeding 70% of the total farm area; • Maintaining an “ecological focus area” of at least 7% of the farmland. • Maintaining permanent pasture.

The Commission wants to promote these greening methods without ‘forcing or punishing farmers to do things for the environment’, as happened before. The measures are consequently voluntary; there will be no sanctions for failing to respect them other than loosing the subsidy.

Linking support to active farmers

Also, Cioloş shows commitment to give the CAP support only to ‘active farmers’. However, the definition of active farmers is rather broad: farmers whose revenue from non-agricultural activity represents 95% of their annual income, would still receive farm aid.

Moreover, the new CAP wants to level payment imbalances and thus limit the total amount to 300.000 euros, which a large farm can receive. In addition its goal is also to level the payments in Eastern Europe with the ones received in the Western Europe. Finally, the EU executive also wants to subsidize acreage farming rather than production totals and end the national sugar production limits and minimum prices for sugar by 2015.

Agriculture Commissioner Dacian Cioloş defended his proposal by saying that ‘Europe needs its farmers and our farmers need public support so that they are able to work well and earn a proper living whilst taking into account the expectations of citizens and consumers’.

Mixed response

Regardless of its good intentions, the new CAP does not satisfy everybody. Political parties, farmer lobbies, environmental activists and taxpayer groups lined up to criticize the reform as either going too far, or not far enough.

Member states France and the UK – the two countries with the most opposing views towards farm aid – are cautious. French farm minister Bruno Le Maire stressed that the proposed greening principles are good but far too complex and out of touch with the economic reality. UK Environment Secretary Caroline Speiman is happy there was no ‘budget increase’, but regrets the ‘lack of radical reform’ in the package.

The farm industry, represented by the EU-farmers’ lobby Copa-Cogeca, fears that the environmental measures in the proposal will only ‘put more costly burdens onto EU farmers’ and plea for a better balance between ecological measures and economical growth. Local farmers’ unions, such as the Flemish Boerenbond, feel even more threatened by the proposal, which ‘lacks flexibility for regional differences’ and ‘does not take into account agriculture in an urbanised region, where every square meter must be used to its fullest’. It is a ‘pure nonsense’ to keep 7% of the land for ecological purposes at a time when the supplies of food, energy and space are becoming insufficient.

At the same time, the center-right MEPs expressed some optimism, but would like to add more simplified rules so that ‘farmers can spend more time working in the fields instead of behind their desk’. Elsewhere, left-wing political parties such as the European socialists stated that this is not the reform they wanted and warned that it offered ‘little more than a greenwash’. The Greens claimed that the CAP reform was ‘gutted’ by the agro-industry lobby and its ‘cheerleaders in the Council, like Merkel and Sarkozy’.

The CAP reform also receives little enthusiasm from European NGOs. The European Public Health and Agriculture Consortium (EPHAC) said the proposal ‘largely ignores public health and does not go far enough towards a ‘truly sustainable food and farming policy’. Concord, which fights for better EU-development aid, was surprised to see measures that ‘reduce overseas impact dropped from the proposal’. The Friends of the Earth Europe environmentalists rebuked the overall package as being ‘weak’ and ‘not likely to tackle food, farming and biodiversity crises’.

However, it is important to underline that this is just a proposal. After the Lisbon Treaty entered into force, the European Parliament has become a co-decider in agricultural policy-making. This implies that now not only EU governments, but also the European Parliamentarians can promote or block the CAP reform in the Council.

Nonetheless, the good news for all interest groups is that this proposal is not the end of the road which we expect to be rocky thanks to many negative reactions that we have been witnessing. In addition, the MEPs will be the focus of intense sectorial lobbying in the coming months.

However, the reform should be completed by the 1st of January 2014.

Image Copyright: youthmedia.eu

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