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10th May 2021

EU states oppose plans to end farm 'subsidy millionaires'

A majority of EU governments have agreed to a gradual redistribution of farm payments from older to newer member states, but few support the idea of limiting payments to the bloc's wealthiest farmers.

Strong divisions were evident at a meeting of EU farm ministers in Brussels on Thursday (17 March), with final conclusions drafted by the Hungarian EU presidency gaining majority rather than unanimous support.

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  • Most European farmers earn below the EU average, but some receive millions in farm subsidies (Photo: Wikipedia)

Debate centered around the European Commission's non-legislative communication on reforming the bloc's common agricultural policy (CAP), published last November, with eastern member states pushing for a fairer distribution of direct payments to farmers.

Payments are currently calculated using a 'historical' stocking formula, which sees them range from over €500 per hectare in Greece to less than €100 in Latvia.

Diplomats said Poland and the Baltics states were pushing hard throughout the negotiations for language which called for an "equitable distribution" of payments, rather than the finally-agreed "more equitable distribution".

Poland was reported to have switched sides at the last minute however when text promising a gradual move away from historical payments was inserted into the conclusions, leaving the other eastern holdouts disappointed.

"This is the first time we have France, Germany and Poland onboard on a text on the future for the CAP," French farm minister Bruno Le Maire said after the meeting. "It shows that the division lines are not down to east versus west, but those who support a strong CAP and those who don't."

Polish farm minister Marek Sawicki remained coy on the subject at a press conference after the meeting, with the main Polish opposition Law and Justice party recently calling for a no-confidence vote against the minister, accusing him of ignoring rural Poland and worsening the country's agricultural market.

Sweden, the UK, Latvia, Denmark, Estonia, Malta and Lithuania were the countries who eventually rejected Thursday's conclusions. A UK government spokesman said they were "not ambitious enough". London is among capitals who have traditionally pushed for a reduction in the CAP's €55 billion annual budget, roughly 45 percent of the EU's total.

Amid reports that a small minority of EU farmers or agricultural companies currently receive annual direct payments in excess of €1 million, the commission last November signaled its intention to introducing an upper ceiling on handouts.

Few member states support the idea however. "The plan is opposed by some countries, while others simply fail to get strongly behind it," an EU officials told this website. EU agriculture commissioner Dacian Ciolos said he would push ahead regardless. "I see no reason not to ... I think it is supported by EU tax payers," he said.

Figures from 2009 show that over a thousand farmers/companies received one million or more euros in direct payments from the EU budget, largely financed by EU taxpayers, plus notable sums to the daughter of a former Bulgarian minister and a Swedish accordion club.

A commission proposal in late 2007 to limit farm payments to a maximum of €300,000 failed to win majority support however, with countries containing large farms such as the UK and Germany raising concerns.

Following Thursday's meeting, the European Parliament is not expected to lay out its position on CAP reform in a paper this June.

The same month the commission will also come forward with draft multi-annual budget proposals (post 2013), which will indicate how much money the EU's future CAP policy will have to play with.

Commission legislative proposals on CAP reform are then expected in the autumn.

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