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EU: Eastern Candidates Upset By Reported Farm Payment Plan

Eastern candidate countries for membership in the European Union are criticizing reported EU proposals that would initially give them only a fraction of the farm subsidies disbursed in current member states. Reports say the proposals from the European Commission, due to be unveiled on 30 January, would mean that candidate states would wait a decade after EU entry before their farmers would be on equal financial terms.

Prague, 28 January 2002 (RFE/RL) -- Officials from EU candidate countries in Central and Eastern Europe are expressing dismay at the European Commission's reported plans to incorporate them only gradually into the Union's farm budget once they become members.

The commission's proposals will not be officially published until 30 January. But correspondents in Brussels are quoting insiders as saying the commission envisages a 10-year transition period before the newcomers would be entitled to receive full payments under the Common Agricultural Policy (CAP).

According to this information, payments to farmers during that time would gradually rise, starting from a base of only 25 percent of the level presently paid to current EU members.

News media over the weekend quoted officials and spokesmen in Prague, Warsaw, and Budapest as calling the commission's reported proposals unacceptable and discriminatory.

Candidate-country diplomats in Brussels contacted by RFE/RL today were more circumspect, saying there can be no formal reaction until the proposals are officially disclosed.

But it is clear they would not favor such treatment. The agriculture counselor at the Polish mission to the EU, Vladislav Pizkorz, says in general it is difficult to envisage how there could be a two-tier arrangement whereby some countries would receive less than others.

"If direct payments will not be made in full, there is an open question of how it can be assured that there is not distortion of competition on the single market, and one of the basic rules of the EU is that there must be no distortion of competition. The commission monitors very closely the terms of competition and takes action if some companies are receiving too much support, which is not allowed under EU rules, and then the countries [concerned] are punished."

It would therefore seem illogical to try to pay some farmers more than others, since that must influence their competitive position.

Pizkorz also rejects any suggestion that Poland's huge and fragmented farm industry could be more easily incorporated into the CAP if only the most efficient, so-called "commercial" farms were classified as eligible for CAP payments.

"I don't know of any example within the [present] EU in which the CAP is limited to, let's say, 'commercial' farms; I could find easily examples of farms which are subsistence farms in Italy, and these are not excluded from the CAP."

Latvia's ambassador to the EU, Andres Piebalgs, says his country also wants full payments from day one of membership. Therefore he says the commission's proposals, if reported accurately, would be a "disappointment." But he cautions against hasty judgments.

"We would like to see the whole package [first], because there is also a lot of talk [circulating] about flanking measures, [such as] increased aid in structural reorganization of farms, and also in regional policy, so we should see the whole package of the commission's proposals."

Without such compensatory measures, he says, Latvia would definitely oppose a slow phase-in of CAP payments.

"We know there are financial limits, but within these limits there should be also some flexibility toward the needs of accession countries. If there will be one common agricultural policy in the whole Union, then it is very difficult to explain to anybody that there will be a long phasing-in [period] for some part of the Union."

But the ambassador notes in addition that the commission proposals are only that -- namely, proposals. The final decision on the Union's negotiating position vis-a-vis the candidates will be decided by the present member states, probably during the spring.

In any event, the stage appears set for some hard negotiations between the commission and the candidates. For their part, commission officials have said that access to full subsidies could discourage necessary reforms in the candidates' agriculture sectors. They also say that flooding the agricultural sectors of those countries with money risks destabilizing their economies.

Counselor Tomas Szucs, of the Hungarian mission to the EU, is skeptical on that point: "They [the EU] have several arguments. We also have several arguments. I think our arguments are at least as valid, probably even more valid than the commission's arguments."

Matters will probably come to a head in the second half of the year, when the actual negotiations are to take place under the Danish presidency of the EU.

Negotiations on all issues with the leading candidates are supposed to be wrapped up by the end of this year, so that entry of frontrunners into the Union can take place in the first half of 2004. Experience has shown that there is little flexibility in negotiating positions on the side of the EU. But any extended wrangling over these most difficult subjects -- namely agriculture and regional development aid -- could shatter this timetable and even risk delay in enlargement.