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EU: European Commission Unveils Farm-Reform Proposals

  • Ahto Lobjakas

Brussels, 10 July 2002 (RFE/RL) -- The European Commission today presented its proposals for reforming the European Union's agricultural policy.

A statement released by the commission in Brussels today says the aim of the reform proposals is to "better justify" farm expenditures, target subsidies in more market-oriented ways, raise food quality, and preserve the environment.

The proposals offer only modest savings on the EU's farm budget of 40 billion euros ($39.8 billion) a year, the planned cuts amounting to only 200 million euros in 2006.

Commenting on the proposals, EU officials today said they do not directly address concerns expressed by the main net contributors to the EU budget -- a group headed by Germany -- that threaten to block enlargement if their costs are not reduced.

Presenting his proposals to the European Parliament today, EU Agriculture Commissioner Franz Fischler spoke of the need to give the EU's Common Agricultural Policy (CAP) a market-oriented "face-lift," making it clear that the commission is not in favor of radical reforms or expenditure cuts. "By 'face-lifting,' I mean that the intention is not to call into question the fundamentals of the CAP. We will continue to need a strong common agricultural policy at the EU level, which has the support of the public and guarantees a common market. A support regime characterized by production-distorting incentives that encourages farmers to farm as intensively as possible, that is smothered in red tape, with production directed by the straitjacket of subsidies rather than market demand, risks losing the support of EU taxpayers," Fischler said.

Central among the commission's proposals are the capping of subsidies to single farms at 300,000 euros, decreasing the subsidies by up to 20 percent over time, and de-linking them from production levels.

Fischler said basic income support to EU farmers should be fixed independently of production and that they should be freed from the obligation to produce cereals or beef, both of which have hitherto been disproportionately subsidized.

The EU's agriculture commissioner also listed the considerations that markets, i.e., consumers, are likely to prioritize: high quality, healthy food; preservation of the environment; animal welfare; and a "living," vibrant countryside.

Fischler said farmers receiving subsidies will in future be subject to stringent environmental, food-safety, and animal-welfare checks, adding that the EU was prepared to compensate efforts going above and beyond the standards set by the commission in these fields.

The funds released by cutbacks in subsidies would not be lost for agriculture, Fischler said, but will instead be invested in broader rural-support measures, aimed at improving the quality of life in the countryside.

Given that today's proposals offer no prospect of significant savings to Germany and other EU net contributors -- which pay much more into the EU budget than they receive -- the deadlock over the financing of enlargement is unlikely to be broken anytime soon.

Germany, Britain, the Netherlands, and Sweden have blocked accession talks on farm subsidies, saying the EU needs to agree on cost-cutting reforms before new members can be admitted.

Fischler today avoided references to the financial aspects of enlargement, saying only that market-oriented reforms will make the admission of new members easier. "Besides everything else, today's proposals have two further positive side-effects: They will make enlargement easier and they will strengthen our hand in the [World Trade Organization] negotiations [on the liberalization of agricultural trade]," Fischler said.

Fischler said the commission's reform proposals would elevate the EU's "levels of credibility" in the so-called Doha farm-trade liberalization talks, to be concluded by 2005.

He sharply criticized the United States for adopting a farm bill in early May, offering its farmers more than $173 million in subsidies over 10 years. Fischler said the U.S. is returning to "Stone Age, trade-distorting" policies, while the EU has adopted a "sensible" approach of reconciling farm policy with social and market expectations.

Today's proposals will now be discussed by EU member governments, which will need to agree on an eventual reform package by the end of the year. To date, there is little sign of unity among the EU member states. Germany has criticized the proposals for not going far enough in cutting costs, as well as various details such as the capping of subsidies at 300,000 euros per farm.

Net beneficiaries of EU agricultural funds like France, Italy, and Spain, on the other hand, have said the commission's plans put the livelihoods of their farmers in danger.