Ministers back review of EU farm funds

LUCIA KUBOSOVA

20.11.2008 @ 17:48 CET

EUOBSERVER / BRUSSELS - After all-night talks at their Brussels gathering, EU agriculture ministers gave a green light to a list of reform measures dubbed the "health check" of the bloc's farming policy, which still eats up some 45 percent of Europe's common budget.

The European Commission filed the proposal last November in a bid to achieve a radical shift, moving EU funds away from direct subsidies to farmers based on their production and instead to supporting rural development projects and climate-change-related innovations.

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Admitting the path to the "dynamic compromise", approved after hours of negotiations, was rather bumpy, Michel Barnier, the French minister whose country currently chairs the EU, said that in the end, the agreement was "almost unanimous," as the opponents could be "easily counted on fingers of half a hand."

One of the most difficult issues turned out to be the phasing out of milk quotas before they are completely scrapped in 2015, as earlier agreed by EU member states. The two biggest countries, France and Germany, voiced concerns over the original plan.

But as part of a final deal, aiming to prepare the sector for a full-blown opening to the market, milk quotas will now rise by one percent a year from 2009 before they expire entirely.

Moreover, small fairy farms in France, Germany and Austria will receive special aid and Italy will be allowed to increase its milk quotas next year despite overshooting them in 2008.

"It certainly hasn't been easy," EU agriculture commissioner Mariann Fischer Boel commented, adding: "The milk situation has changed extremely over the past ten months - none of us had expected it and we had to tackle this situation."

New members still unsatisfied

Some of the "new" EU member states from central and Eastern Europe, such as the Czech Republic, Slovakia and Estonia, remained opposed to the agreed package and protested against the persistant gaps in aid from common EU coffers to farmers from various quarters of the union.

Ms Fischer Boel said that even "old" member states admitted that there is "not a totally level playfield" among EU states and agreed to compensate the newcomers with an bonus sum of €90 million until direct payments to their farmers have been fully phased in.

But the Slovak minister Stanislav Becik said that this compensation is "far too low," pointing out that the health-check package as a whole - despite aiming to make the bloc's farm policy healthier - will further boost the gap between the east and west of Europe.

On the other hand, several countries in central and eastern Europe as well as Germany welcomed the solution of the dispute over future subventions for the biggest farms, predominantly present in these states and often a remnant of the Communist era.

Originally, the commission wanted a cut in handouts to all farmers receiving more than €5,000 a year, by raising the current amount (5 percent) of the money they receive from Brussels to be transferred into the Rural Development budget to 13 percent by 2012. The compromise deal states that 10 percent of direct aid should be shifted.

Moreover, bigger farms were to lose some extra cash, starting already with farms receiving more than €100,000 a year. The approved package however only confirmed an extra cut of four percent for farms with aid worth over €300,000.

Commissioner Fischer Boel argued that despite ministers voting for a less ambitious version, she said: "It's extremely important that we have demonstrated that there is majority to say that there is a reason for asking a little bit more for the biggest farmers."

"I think that we managed to improve the possibilities for European agriculture to meet the new challenges and to be prepared for the challenges of 2013. If we had failed, the looser would have been the EU's agricultural sector," she added.