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Agriculture

EU proposal seeks big reforms on farm subsidies

The EU's agriculture commissioner wants to link subsidies to environmental regulations. His proposal has garnered criticism from environmental groups and parliamentarians alike.

Dacian Ciolos has big plans - the agricultural reform he supports is meant to be a green revolution. The EU agriculture commissioner wants to prevent serious environmental damage and a massive exploitation of nature in the European Union.

Ciolos' proposals are organized around the principle that public money should be linked to public services. That means farmers that receive so-called direct payments from the EU from 2014 onwards will only receive the full subsidy if they abide by environmental regulations designed to protect nature. If the regulations are not adhered to, they could lose up to 30 percent of their subsidy from Brussels.

Center of the row

The EU's financial plan for 2013 proposes a budget of close to 60 billion euros ($78 billion) for the agricultural sector - over 40 percent of the entire EU budget. That represents a lot of money for a sector that employs less than five percent of the EU's workforce.

A tractor follows a combine harvesting corn for animal feed
(c) Sean Gallup/Getty Images

Subsidies are not distributed equally across the EU

But the injections from Brussels are reduced year by year. The problem - the smaller the EU budget, the smaller the payments to farmers. That has left the EU divided - the eastern Europeans want more money, but for other countries, the suggested cuts don't go far enough. In November 2012, the commissioner's proposals were rejected by representatives from EU members. All that is certain is that money will only be made available if certain environmental conditions have been fulfilled. The consequence: more rules, more bureaucracy.

Up until now, these financial subsidies have been calculated very simply - the area of the fields determines the amount of money, regardless of what is grown or produced there. "If someone in Italy used to grow corn, but now grows wheat, they still get over 1,000 euros per hectare," says Albert Dess, MEP for Germany's conservative Christian Social Union and a member of the parliament's agriculture committee.

EU-wide rules

"In Germany farmers would rather have less money than more bureaucracy," Dess says. The interests of agricultural representatives - from small farmers up to major industrial corporations - are too different across countries to all be put under one category, he argues. "We have big differences in the payments for individual member states," says Dess. "So a Latvian farmer gets 78 euros and a Greek landowner gets 575 euros. That's terrible. That isn't acceptable over twenty years after the borders have been opened."

Dess runs a farm in Bavaria himself. He says that his constant dialogue with affected farmers has taught him which problems come up. "In our new parliamentary resolution we have stated that we don't want any new payment system that will lead to new checking and sanction mechanisms," he says. "That was agreed by 90 percent of the votes in the parliament. The commissioner hasn't stuck to the resolution, and now we're getting a new system."

Willy Kampmann, director of the German Farmers' Association in Brussels, is also critical of the developments. "We can see that agricultural policy has become more complex," he says. "The formation of direct payments could bring more bureaucracy." Kampmann underlines that if large parts of the agricultural income get cut, then companies have to react. The structural changes in agriculture would take place in even bigger steps.

Agricultural policy without direct subsidies?

Direct subsidies are the heart of the Common Agricultural Policy (CAP). They were introduced at the end of the nineties both to guarantee product prices and to secure farmers' incomes. But the subsidies sparked criticism in many developing countries. Because of the low cost of agricultural land and workers they had enjoyed an advantage in the agricultural sector. The state subsidies in the EU had shut them out.

Albert Dess
Photo: Armin Weigel dpa/lby +++(c) dpa - Report+++

Dess thinks the reform will create too much bureaucracy

The newer EU member countries also offer low prices for farming land. Lutz Ribbe, conservation director for the environmental organization Euronatur and member of the EU's agricultural commission, is skeptical of the development. "The Netherlands, for example, has reached its limits," he says. "The farmers' incomes aren't right anymore; the environment is collapsing. The big companies, which can't develop anymore, are leaving the Netherlands and are being welcomed with open arms in Eastern Europe."

No market value for the environment

Ribbe says stagnation in agricultural reform is responsibility for the inequality between member states in the EU, but that isn't only the commissioner's fault.

"Agricultural politicians that decided things - they are often former ministers, they've got the agricultural lobby on their laps, and Ciolos is battling against that lobby," he says, adding that the commissioner's proposal would be a step in the right direction. "The farmers who work ecologically face economic disadvantages. The new structures of the direct subsidies would redress these disadvantages."

Environmental farmers

Dess says that farmers are prepared to adhere to Ciolos' plans. But he says ecological agriculture was only possible if the landscape conditions are taken into account. "I don't understand how 27, and soon 28, states are supposed to obey the same regulations," he says. "You need a catalogue of national possibilities, from which every farmer from Finland to Cyprus can choose the appropriate measures."

The European Commission, the European Parliament, and the Council of the European Union are to discuss the reform until June 20. Before Ciolos there were already several agricultural commissioners who had wanted to usher in a revolution. It remains to be seen whether in the battle between politicians, lobbyists, vested interests a common policy can still be maintained.

DW.DE