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EU: Enlargement Held Hostage To Farm Reform

European Union agriculture ministers yesterday had their first discussion on EU agricultural-policy-reform proposals presented by the European Commission. Most ministers used the opportunity to cement well-known national positions. On the one hand, net contributors to the EU budget, headed by Germany, said the market-oriented reforms do not offer sufficient savings for enlargement to take place. On the other hand, current beneficiaries, led by France, questioned the need for any reforms at all. RFE/RL's Brussels correspondent Ahto Lobjakas followed the debate.

Brussels, 16 July 2002 (RFE/RL) -- Yesterday's meeting in Brussels of the European Union's agriculture ministers confirmed the worst fears of most candidate countries.

Although reforming the EU's Common Agricultural Policy, or CAP, is ostensibly about modernizing the bloc's agriculture sector and bringing market forces to bear on it, the cost of enlargement is the pivotal factor in the minds of proponents and opponents of reforms alike.

Supporters of wide-ranging CAP reform welcomed yesterday what they described as "positive" and "promising" European Commission proposals to abolish the link between farm subsidies and production levels. They applauded the suggestion that subsidies be cut by 20 percent over six to seven years and that the savings be channeled into supporting rural development beyond narrow agricultural considerations.

Most were also satisfied that reforms would strengthen the EU's hand at World Trade Organization farm-trade-liberalization talks, especially after the United States adopted a highly protectionist farm bill in May.

But supporters of reform -- overwhelmingly countries that pay more into the EU's annual 40 billion-euro ($40.14 billion) farm budget than they receive -- left no doubt that the envisaged cuts of 200 million euros in 2006 were far from enough. They also made it clear that without cutting the agriculture budget, enlargement remains unaffordable.

Germany contributes more than a quarter of the EU's annual farm budget. The country's agriculture minister, Renate Kuehnast, was predictably one of the harshest critics of this aspect of the reform proposals. "First, it is for us of the utmost importance to create leeway through cutting subsidies for the accession of the candidate countries. I'm not saying this is a precondition [for enlargement], but enlargement costs money, and Germany has precisely here an interest to find money for it. Second, we are particularly interested in how these decisions, as well as from an agricultural perspective, the reform package, can be transferred to the candidate countries. We must surely not only discuss it amongst ourselves but with them as well," Kuehnast said.

Embattled European Commission officials have said enlargement is financed under a separate, non-CAP-related budget heading until 2006. They say that further financial issues should only be addressed in discussions over the 2006-2013 budget. Germany, however, clearly does not believe that significant budget cuts could be achieved with 25 countries at the table in 2005.

Other net contributors, Britain, the Netherlands and Sweden, were similarly pedantic in rejecting any links between enlargement and CAP reform, but equally determined to mention enlargement in their assessments of the commission's reform package.

The minister from the Netherlands, Laurens-Jans Brinkhorst, offered the bluntest summary of all. He said the EU, and the candidates, face a choice between two evils if farm budgets are not cut now: Either the new members will, for a long time, receive far less in agricultural support than the old members, or enlargement is unaffordable.

In an irony rare in enlargement politics, the most heavily subsidized member states, which will have the most to lose from enlargement, were the keenest to warn that demands for far-reaching CAP reform could seriously delay the planned accession of new members in 2004.

This, French Agriculture Minister Herve Gaymard warned, would be the price of the net payers' push for cutting costs. "The conclusions of the document at hand show the indispensability of keeping the 'mid-term review' [of the CAP] well separated from discussions of enlargement, as emphasized earlier by [the EU's Agriculture] Commissioner [Franz] Fischler. If we wish to succeed in keeping the deadlines envisaged in the [enlargement] 'road map,' with which we have entered a political engagement with regard to the candidate countries, there can be no question of linking it with the reform of the Common Agricultural Policy, as this would inevitably lead to a delay [in the road map]," Gaymard said.

Tellingly, however, France, with fellow net beneficiaries Spain, Portugal, Ireland, and Italy, spent more time indicating that they are unhappy with the commission's plans even as they stand. One after another, their ministers rejected the need for any serious reforms before 2006, attacking in particular the proposed 20 percent cut in subsidies and the de-linking of support from production levels.

Most also had pressing national criticisms of more specific measures, be they cuts in subsidies to olive or durum wheat growers, or beef farmers, which threaten farming incomes in their countries.

Technically, EU agriculture ministers could adopt the reform package -- with whatever modifications they can agree on -- with a "qualified majority" of about two-thirds of the member countries. It is much more likely, however, that farm reforms will come head-to-head with the conclusion of enlargement talks at the EU's Copenhagen summit in December.