ECONOMY

Greece obtains delay in negotiating for key farm subsidies

Mediterranean countries, including the Greek government, have gained more time to negotiate changes in the European Union’s support regime for the prices of Mediterranean products, such as olive oil, cotton and tobacco. EU ministers, building on principles agreed upon last June for overhauling subsidies for cereals and livestock, were scheduled to debate changes in the subsidy payments to tobacco, olive and cotton growing farmers. However, the combined actions of Greece, Italy, Portugal and Spain have ensured that negotiations will resume on April 19. Of the four countries, Greece and Spain have elected new governments and the new ministers asked for more time to consider all the arguments. At the heart of the debate are concerns among the producers about farmers abandoning land due to the decoupling of subsidy payments from production. Agriculture Minister Savvas Tsitouridis told reporters after the meeting that the government’s aim is «to improve the Commission’s proposals concerning the three products.» Tsitouridis criticized the previous government for not having done enough to protect subsidies to these products and for agreeing to a discussion on them later than for the «northern» products, thus losing leverage in negotiations. He also told EU Agriculture Commissioner Franz Fischler that his government is determined to maintain production and will not merely accept «alms» in the form of reduced subsidies. Backed by France, the group of four southern countries has enough clout under the EU’s complex weighted voting system to block the reform plans authored by Fischler. The three reforms, along with another plan for hops, will be negotiated as a package. They would enter into force in 2005. Probably the fiercest row will be over tobacco, where the EU has often been criticized for subsidizing growers, while spending millions of euros to promote anti-smoking campaigns. Fischler wants a phased removal of the subsidy-output link for tobacco and abolition of national production quotas. Tobacco is of prime importance for Italy and Greece. Both are worried about the idea of complete decoupling and want more flexibility for disadvantaged regions – a view shared by France. Spain, Italy and Greece are the world’s top three producers of olive oil, while Greece is by far Europe’s top cotton producer. But it has recently been penalized for excessive production and the currently governing conservatives have been vocal in supporting the tobacco growers’ demands, gaining decisive votes in the process.