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August 11, 2011 10:24 pm
Subsidy payments to Europe’s largest farmers will be cut sharply under early proposals being crafted in Brussels that would cap European Union funding to any single farm at €300,000 a year from 2014.
But the plan, currently being drafted by the European Commission, is likely to face stiff opposition from national governments, who have previously resisted attempts to change the way the €55bn a year Common Agricultural Policy is run.
The Commission’s proposal, which will be finalised in early September, is part of a larger overhaul of how subsidies to farmers – the largest single part of the EU’s budget – are allocated.
The new policy would gradually reduce subsidies to any farmer receiving more than €150,000, with a complete cut-off at €300,000, to fight the perception that the bulk of the CAP is benefiting large agro-industrial concerns and rich landowners.
A similar idea was floated by the Commission in 2007 before being struck down by national governments, many of whom recently indicated that they continued to oppose caps amid worries overall farm payments would be cut.
The new setup would cut direct farm subsidies by over €2.5bn, prompting a likely veto from France, which is the largest recipient of CAP and its staunchest defender. Some new EU member states in Eastern Europe, where farms tend to be smaller, are more supportive. However, national governments are united in seeking to limit Brussels’ ability to redirect farm spending away from traditional beneficiaries.
“Member states may not like it, but this is one of the issues that taxpayers most frequently complain about,” said a European Commission official briefed on the proposals.
Other ideas in the leaked proposal include tying payments to new environmental criteria, for example by encouraging farmers to diversify crops or earmark part of their land for ecological purposes.
The aim is to move further away from a direct link between agricultural production and EU subsidies, which in the past led to milk lakes and butter mountains – an image which dented the CAP’s credibility with the European public.
Limits on payments would have a disproportionate impact on western European farms, which tend to be larger than those in new EU member states in the east. Britain, where inheritance customs have led to estates not being divided up into several smaller parcels, would be among the most highly impacted.
“We’re opposed to capping and we’ll continue to lobby hard to defeat this proposal,” said a spokesman for Britain’s National Farmer’s Union, who estimate over 800 farms would be impacted. “It is still only a proposal at this moment, so there is still an opportunity to try and influence [it] before it is formally adopted.”
The CAP debate comes as part of a larger debate on EU budget from 2014 to 2020, which will be agreed in the coming year. Early proposals released in the spring suggest keeping farm spending at current levels while allowing other areas of expenditure to grow.
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