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EU: Crucial Farm Talks Enter New Stage

Prague, 4 March 1999 (RFE/RL) -- Member states of the European Union today enter a new phase in crucial negotiations aimed at reforming the union's common agricultural policy.

The new round of talks, taking place in Brussels between EU agriculture ministers, is set to begin today and to last as long as necessary to break the present deadlock over farm financing policies.

The issue is of key importance not only to the present 15 member states, but also to the 10 Central and Eastern European candidate members. That's because successful internal reform is seen as an essential pre-condition for eastward expansion of the union early next century. The present reform process is also of significant interest to farmers in the candidate countries, in that it gives indications of the basic financial benefits regime that will probably still be in force when they join the EU.

Over the past few weeks the agriculture ministers' talks in Brussels have been contentious and have been dominated by a debate between Germany and France, each backing widely differing ideas according to their national interests. It now appears that the French have managed largely to win the debate with current EU president Germany. Let's examine what has happened. A key pillar of the German negotiating stance has been the demand for national co-financing. That means that individual governments should themselves pay 25 percent of the price support payments to their farmers, instead of relying solely on the EU budget for those payments. That would mean a bigger payment burden on France, and a smaller one for Germany. Germany is by far the biggest net contributor to the EU budget, and says it cannot sustain such payments any longer.

France has fought bitterly against national co-financing, and last week brought the talks to the point of failure over the issue. The French have offered as a substitute something called "degression", meaning a gradual reduction over time of EU price support payments to farmers, for instance by 3 percent annually from 2000 to 2006. French officials say this concept is specifically tailored to Germany's needs for a reduction in overall costs, and represents a definite sacrifice by France -- which has Europe's biggest farm sector.

The signal France was seeking has now come from Bonn. Chancellor Gerhard Schroeder himself has said that although co-financing remains on the negotiating table, there are "other" possible means of cutting Germany's net contribution over time. The magic word, though unspoken by Schroeder, is degression. That's why French officials are portraying this new round of the Brussels talks as a fresh start, and speak optimistically of compromises within reach. They note EU Executive Commission President Jacques Santer has spoken of degression as a possible solution, and the Commission has put forward its own model for that process, as have other member states.

So progress toward an agreement appears to have been made. But Bonn is far from pleased by developments. German Agriculture Ministry spokesman Stefan Taxis has told RFE/RL that under the main European Commission proposal for degression, the farms most affected would be in eastern Germany. That's because of the big size of many of the farm enterprises there, which are the successors of the old Marxist collectives. Taxis said that this is unacceptable.

But the Germans too want the problems to be overcome. They have tied the success of their six-month presidency to achieving radical EU reforms, not only in agriculture, but also in the broader context of the so-called Agenda 2000 financial program. Taxis says Germany is optimistic: "By the end of March, when the Berlin EU summit will take place, the Agenda 2000 package will have reached a successful compromise, involving all member states. We are also optimistic that the Agriculture Ministers will be able to achieve a compromise. The member states clearly signaled last week the wish and will for compromise, although there are still technical questions to be resolved."

Beyond degression, there are indeed several highly technical problem areas still to be resolved, including the important question of milk production quotas. By contrast, good progress has already been made in the area of reduction of guaranteed price supports for grain and beef.

The Brussels farm talks are open-ended, and can continue if necessary right up until the March 24-25 Berlin summit of EU heads of state or government.