ECONOMY

Greece, Italy, Spain attack EU farm reform proposals

Brussels – European Agriculture Commissioner Franz Fischler yesterday officially presented his proposals concerning reform of the subsidy regime for products grown in Mediterranean countries, such as cotton, tobacco and olive oil. The discussion that took place in yesterday’s Council of Agriculture Ministers was brief but intense. In any case, formal negotiations will begin in next month’s council. Yesterday’s proceeding were marked by an attack on Fischler’s proposals by the agriculture ministers of Greece, Giorgos Drys; Italy, Giovanni Alemano and Spain, Miguel Arias Canete. However, no other ministers supported the three. The Commission’s main aim is «decoupling,» that is, breaking the link between subsidy and output, which has created huge surpluses in some products and fostered corruption by farmers eager to receive ever-higher subsidies. The nature of subsidies will change to provide income support and encourage environmentally friendly farming. Subsidies for tobacco will decrease, because the Commission, in effect, wants to actively discourage cultivation. Drys declared that he is is opposed neither to the principle of decoupling nor to the introduction of environmental standards as a factor in determining subsidies. He objected, however, to several points, especially partial decoupling. If, he said, the Commission were to link only a third of their subsidy to tobacco farmers to production, this would lead many of them to simply abandon cultivation and limit themselves to receiving the decoupled part. He also attacked the Commission’s provisions whereby it will be the state’s responsibility to determine whether farmers can receive part of their subsidy on the basis of fulfilling certain criteria, including environmentally friendly farming. Drys’s objection has a clear rationale: Putting the onus on the State to decide which farmers deserve higher subsidies than others creates a politically explosive situation, especially in Greece, where rewards on merit are unthinkable. This is, after all, a country where all civil servants, for example, receive a «productivity bonus» irrespective of their productivity. The Agriculture Ministry clearly wishes to avoid this hot potato. Drys was even more critical about the Commission’s proposals on tobacco. According to these, producers with an annual output of less than 3.5 tons – 55,000 out of 60,000 Greek producers – will receive income support irrespective of production. Producers with an output of between 3.5 and 10 tons will receive 80 percent of the original subsidy, while the amount paid to larger producers will decrease 30 percent each year between 2005 and 2007. The amounts saved will be used to finance those farmers wishing to switch to other crops. Drys argued that this would lead to thousands of lost jobs in tobacco processing and cigarette-making firms. Italy’s Alemano also focused on the tobacco proposals, saying that this product provides jobs to 280,000 people in his country. As the presiding minister, however, he was not overly critical. Arias Canete said the proposals would lead to a mass exodus from Spanish regions such as Estremadura and Andalusia. He said his country could not agree to the proposals unless they were revised. Alemano told reporters that he will meet with Drys and Arias Canete in mid-October, ahead of the next agriculture council, as well as with farmers’ unions, to see if the three countries can coordinate their strategy.