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Analysis: EU Farm Aid Under Spotlight

The report estimates that 80 percent of EU agriculture subsidies are spent on grain, beef and dairy products, which are produced predominantly in northern European states like Britain, Germany and the Netherlands, with only 20 percent benefiting olive, wine, tobacco and fruit farmers in poorer Mediterranean countries.
by Gareth Harding
UPI Chief European Correspondent
Brussels (UPI) Aug 19, 2005
Supporters of the EU's much-criticized Common Agricultural Policy, which doles out more than $60 billion of subsidies to European farmers each year, argue the generous handouts are needed to protect smallholders from fleeing the land and to top up the income of poor rural folk.

But a two-year study into where CAP money actually goes blows a gaping hole in this argument. The in-depth investigation, carried out by a team of British academics, found rich regions in northern Europe receive a far bigger slice of the cake than poorer regions in the southern part of the continent.

"The CAP was designed to support the sorts of products grown in northern European countries and in such a way that it benefits larger farms, because it works by supporting prices, which means the more you produce the more subsidy you get. So more money is going to the richest regions," Mark Shucksmith, professor of planning at Newcastle University and one of the authors of the research, told the Financial Times.

The report estimates that 80 percent of EU agriculture subsidies are spent on grain, beef and dairy products, which are produced predominantly in northern European states like Britain, Germany and the Netherlands, with only 20 percent benefiting olive, wine, tobacco and fruit farmers in poorer Mediterranean countries.

The debate over farm subsidies shot to the top of the EU's political agenda in June after French President Jacques Chirac called into question London's $6.4 billion annual rebate from Brussels.

British Prime Minister Tony Blair rebutted the attack by suggesting he would only be willing to discuss the rebate if the EU took steps toward reducing farm subsidies - which, even after recent reforms, still eat up over 40 percent of the bloc's budget.

The blazing row over farm subsidies, viewed as untouchable by generations of French leaders, was at the root of EU leaders' failure to agree the club's budget for 2007-13 at a bad-tempered summit meeting in June.

Shucksmith said the report's conclusions would strengthen the hand of those EU leaders seeking a root-and-branch reform of the Common Agricultural Policy.

"Tony Blair is right in saying that the CAP money should be redirected and that this needs to begin before 2013," the e-Politix.com Web site quoted the professor as saying.

"We are not talking about a sudden change but a gradual and preferably well-planned move towards measures that will provide a sustainable future for our rural areas."

News that Dutch Agriculture Minister Cees Veerman received more than $230,000 in EU farm subsidies last year has also reignited calls for a radical overhaul of the CAP and boosted a Europe-wide campaign for more information on who benefits from EU farm subsidies and by how much.

In the vast majority of European states, recipients of EU farm subsidies are not required to disclose how much they receive from Brussels' coffers. However, public pressure in Britain, Denmark and the Netherlands - which will publish a list of which farmers get EU subsidies next month - has forced governments in the three countries to open their books.

The release of such data in Britain and Denmark has already caused severe embarrassment after it became apparent that wealthy landowners were the major beneficiaries of EU largesse. In Britain, the prince of Wales - hardly the poorest man in the kingdom - was shown to receive millions of pounds of taxpayers' money, while in Denmark the list of recipients included Prince Joachim, the husband of EU Farm Commissioner Mariann Fischer Boel and several members of the Cabinet.

The traditionally open countries of northern Europe may be willing to come clean about who gets EU farm subsidies and in what amounts, but there is little prospect of that happening in France and other southern European countries not famed for their transparency. There is also little hope of Paris agreeing to radically reform the CAP while it remains the largest beneficiary of aid.

However, Shucksmith - and others favoring a change of direction in EU farm policy - remain hopeful the World Trade Organization will force the EU to reduce import tariffs and export subsidies on agricultural goods.

"The history of reforms of the CAP is that they have come in response to external pressure or budgetary crises. We have both at the moment, so reform is possible, but it will be opposed by some very strong national interests."

Michiel van Hulten, a Dutch former member of the European Parliament who revealed that Queen Beatrix received EU money for her Italian olive farm three years ago, believes the "no" vote in June's referendum on the EU constitution in the Netherlands will also add to pressure for change.

"The popular uprising against the constitution helps. Now, the case for Europe has to be made all over again," said the former politician, who is now an analyst with the center-left think tank Policy Network.

"It is hard for politicians to justify a policy that benefits a small number of rich farmers rather than the people at large. Most voters believe there are more important priorities for their money to be spent on."

All rights reserved. � 2005 United Press International. Sections of the information displayed on this page (dispatches, photographs, logos) are protected by intellectual property rights owned by United Press International.. As a consequence, you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the content of this section without the prior written consent of United Press International.

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