ECONOMY

CAP reform proposals

BRUSSELS – European Agriculture Commissioner Franz Fischler will present today his proposal for an «interim» revision of the Common Agricultural Policy. In their initial form, Fischler’s proposals had been strongly opposed by France and other recipients of EU largesse. As a result, Fischler has made some revisions, but his proposals maintain their original thrust. The main aim of CAP’s interim revision is to cease basing subsidies to farmers on the amounts they produce. Beginning in 2004, the existing system of subsidizing production will be gradually changed to emphasize direct income support. Farmers receiving less that 5,000 euros annually will not see any changes in the amount of EU aid received. On the other hand, thanks mainly to France’s opposition, the cap of 300,000 euros in EU aid for the largest farmers is no longer part of the proposals. The EU will demand that farmers be more environmentally responsible and will also require them to be more attuned to what markets offer, since the system of price supports will be gradually removed. Total support for farmers in the current 15 member states will be gradually reduced from 2007, to the tune of 1 percent annually. This reduction will continue until 2013 and the funds will go to the farmers of the incoming EU members, eight of whom are poorer Eastern European countries. It is doubtful, however, whether these savings will be enough to cover even the needs of the most important newcomer, Poland. Fischler’s original proposal called for the reductions in aid to current members to begin in 2004 and to amount to 3 percent annually. The new system will initially be applied to crops such as wheat and corn, cotton, legumes, rice and dairy products as well as to cattle herds. It will gradually be extended to oils, fruit and vegetables and sugar. Farmers, long accustomed to the price support system, which effectively shields them from the vagaries of open markets, will certainly oppose these proposals.