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Eastern Europe: EU Official Calls For Farm Subsidy Reform

By Bill Echikson

Brussels, 18 July 1997 (RFE/RL) - Europe's farm commissioner Franz Fischler wants to shake up the cosseted world of European farmers -- and his success or failure will do much to determine how fast eager Central and East Europeans enter the European Union.

On Wednesday, Fischler called for an overhaul of the EU's massive farm subsidy programs. Specifically, he wants guaranteed farm prices to be slashed by 30 percent for beef, 20 percent for cereals and 10 percent for dairy products. Farmers would be compensated for their losses with direct payments, but not totally compensated.

The call came parallel to the EU's announcement of the opening of negotiations with Poland, Hungary, the Czech Republic, Estonia and Slovenia. An RFE/RL special correspondent in Brussels says that unless order is brought into the wasteful farm sector, the entry of these new countries, could overwhelm EU finances, producing further food mountains costing thousands of millions of dollars.

Fischler told our correspondent that the EU is aware that in Poland there are more farmers than in Germany and France put together, which makes solutions difficult. He said the most important thing is that farmers and their families should know that they will have more opportunity in the future to find employment outside of agriculture.

Such callous words do not go down well with the powerful western European farming lobby. Risto Volanen, secretary general of the Committee of Agricultural Organizations, called the proposals an act of aggression that would force more and more farmers off the land. "We accept the need for change," Volanen told RFE. "But as they stand, the proposals are unacceptable."

The proposals are probably even more unacceptable to relatively poor East European farmers. In his RFE interview, Fischler warned them that they should not expect to strike a bonanza when their countries join the EU. Specifically, he said they would not qualify for direct compensation.

He said that East European farmers should know that the prices for their goods will go up if they join the Union, so why should the EU then pay them compensation if their income will increase anyhow because of higher food prices?

Fischler also warned the East Europeans that they must make big improvements in their farming practices before joining the EU. And he said improvements are also needed to correct what he described as "weak veterinary inspections"

In farm trade, though, Fischler did not foresee problems. Although stiff EU tariffs remain on most East European food products, the commissioner said East European farmers did not represent a competitive threat against their West European counterparts.

"I don't fear Europe will be flooded with East European products," Fischler said. "Only one applicant country now is a net exporter of agricultural goods. That's Hungary. All the others are net importers, and as these countries grow, they want more Western European food products, high standard products, and therefore, imports in these countries are rising much faster than exports."

When it comes to farms, Hungary and the Czech Republic are the furthest advanced of all the East Europeans set to enter the EU. He said their former state farms which are now private companies are likely to be competitors to EU farms in cereal production in the coming years.

Estonia presents few problems because it has so few farmers. Both Slovene and Polish farms are small -an average of only six hectares - a legacy of private ownership throughout the communist period. But Slovenia is much better prepared. Fischler said that in Slovenia, at present, about 80 percent of farmers are part-time, and the farmers had a second job to ease their financial situation. He said the same concept could be applied in Poland, where for instance tourism or craft activities could be combined with working on the land.

Furthest behind Poland are Romania and Bulgaria. Fischler noted that in general, restructuring is not as far advanced in Romania and Bulgaria as in other countries, and that also goes for agriculture. Their production level is lower because the damage under communism was much higher. And they have recovered much more slowly than in places like Slovenia and the Czech Republic. They must therefore strengthen their farm sectors before the EU begins accession talks, Fischler said.