22nd Oct 2020

Sweden in favour of reduced farm subsidies

  • Dairy farmers are wary of EU plans to scrap milk quotas (Photo: European Commission)

Sweden favours a reduction in the EU's agriculture budget and greater emphasis on rural development, says the country's agriculture minister, Eskil Erlandsson, with Sweden taking over the EU's rotating presidency on 1 July.

"We'll concentrate on the second pillar [of the common agricultural policy] (rural development), how we can promote the countryside and rural areas, and how to ensure a fair distribution of cash between countries," said Mr Erlandsson.

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"It's very important to have a common agricultural policy but it will have less money," he added.

The comments were made as EU agriculture ministers hold a three-day informal meeting (31 May – 2 June) in Brno, Czech Republic, to discuss what shape the CAP should take during the next financial period post 2013.

The current policy uses up roughly 40 percent of the EU's budget and is divided into two main areas (pillars): market intervention measures such as export subsidies (pillar 1), and financing of projects to help develop the countryside and protect the environment (pillar 2).

Under a 2003 CAP reform, money is already being progressively channelled from pillar 1 to pillar 2, a process known as 'modulation'.

As well as the future distribution of money between the two pillars, the current Czech presidency has been pushing hard for a fairer distribution of money between the 27 member states, with countries that joined in 2004 or afterwards currently receiving significantly less than older members.

Storm brewing

Sweden's desire to reduce the overall size of the CAP is likely to run into considerable opposition.

"The Swedish government holds that the share of the common agricultural policy in the whole EU budget has to be decreased," said Mr Erlandsson.

But this wish will not be popular with countries such as France, Germany and Spain who currently receive almost 50 percent of the EU's direct payments.

Added to this, the debate on the region's future agricultural policy comes at a sensitive time as milk producers are currently suffering from a fall in prices.

Dairy farmers in Belgium, France and German recently staged protests about their precarious financial situations. The EU has brought in a number of temporary support measures such as the reintroduction of milk exports subsidies.

However, Mr Erlandsson said such measures were not part an effective solution.

"We have to bring down export subsidies from the US and the EU," he said.

He also supports EU plans to scrap milk quotas by 2015, something dairy farmers fear will cause prices to fall even further.

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