Critics of the bloc’s common agricultural policy (CAP) had urged the European Commission to take advantage of high global food prices and cut the huge subsidies it pays to farmers in a reform of the policy from 2014.
But against a backdrop of increasing market volatility, resource scarcity and climate change, the Commission rejected calls for subsidy cuts and instead proposed refocusing spending on the increasing threats facing farmers.
“The risks to European farming come not just from extreme weather events, climate change, but also from market instability and sharp falls in prices or producer incomes,” said EU farm chief Dacian Ciolos, presenting the proposals in Brussels.
The Commission’s stance is supported by pro-farming countries such as France, whose President Nicolas Sarkozy has pledged to defend the CAP with an eye to securing rural votes in next year’s presidential elections.
But the plans will face opposition from other countries such as Britain and Sweden, who want to see a sharp cut in EU farm spending to fund new growth-enhancing measures such as research and innovation.
The CAP reform plans must now be jointly approved by EU governments and lawmakers in the European Parliament — a process which is expected to take up to two years to complete.
The Commission’s desire to keep overall farm spending at more or less its current level until 2020 was confirmed in proposals for the EU’s next long-term budget for 2014-20, announced in July.
The reform plans begin the process of addressing current imbalances in direct subsidies which sees farmers in Italy and Greece receive about 400 euros ($545) per hectare, compared to less than a hundred euros on average in Latvia.
In a speech to EU lawmakers, Ciolos said he wanted farmers in all countries to receive at least 90 percent of the average level of direct payments — currently about 270 euros per hectare — but gave no deadline for achieving the goal.
To help free up funds for the redistribution, Ciolos said large individual farms would see their subsidies capped at 300,000 euros a year from 2014.
“The Commission proposes the progressive reduction of basic subsidies above 150,000 euros, and capping them at 300,000 euros,” he said.
In future, 30 percent of direct subsidies will be conditional on meeting new environmental criteria, such as forcing arable farmers to grow at least three different crops, and leaving seven percent of farmland ecological fallow.
Those plans drew accusations of “greenwash” by environmentalists, but EU farmers said the requirements would damage their competitiveness.
“It does not make sense to require every single farm to stop producing on a certain percentage of their land (ecological set-aside) when world food demand is set to rise by 70 percent by 2050,” EU farm union Copa-Cogeca said in a statement.
The plans also included a proposal to limit payment of EU subsidies to “active farmers” only, and Ciolos said he doubted whether airports and golf courses needed the EU farm subsidies they currently receive.
The 27-nation bloc should retain its existing market management tools after the reform — including public intervention and private storage aid — to cope with market volatility and future food crises, Ciolos said.
EU sources with knowledge of the plans said the Commission had agreed to propose ending the bloc’s system of national sugar production limits and minimum prices from 2015 — not in 2016 as had been suggested in earlier drafts of the reform plans.
The move is designed to avoid a repeat of the current shortage of sugar on the EU market, and will also allow an increase in EU sugar exports, which are currently capped under world trade rules due to the bloc’s sugar quota system.
