EU Commission unveils CAP reform proposals
BRUSSELS – The European Commission yesterday presented its proposals on the revision of the Common Agricultural Policy (CAP), in which it argues for a transition from subsidized production to a more «balanced» development of the countryside. This so-called interim revision was supposed to precede a final and more substantial revision in 2006. Even in this form, however, it contains a number of radical proposals that are certain to spark controversy. The Commission endorses the view of northern European countries that the CAP costs too much or, rather, they pay too much, to subsidize the southern Europeans, a term which, in this case, includes the French. Thus, the main thrust of the proposals is the split between production and subsidies and the reallocation of resources to a rather nebulous «countryside development.» European Agriculture Commissioner Franz Fischler, who presented the Commission’s proposals to the European Parliament yesterday, proposed that farmers be paid a certain amount of money annually, irrespective of what they produce and in what amounts. This amount will vary according to the size of the farms, but cannot exceed 300,000 euros annually. Farmers receiving annual subsidies below 5,000 euros will be exempt from the scheme. The others will see their EU subsidies decline 20 percent over a period of seven years. They will, however, be allowed to recover these subsidies through the national budgets, which means farmers in the richest countries will benefit. Subsidy cuts will begin immediately in wheat, oil seeds, legumes, rice, potatoes and beef, sheep and goats. Cuts in milk production subsidies will kick in in 2005 and gradually, all cuts will involve all agricultural products. The Commission hopes that this measure will wean farmers off subsidies and force them to become more attuned to market needs. Any remaining subsidies will be tied to the producers’ following environment production and food safety rules. The Commission forecasts annual savings of 600 million euros, which can be redirected to countryside development programs. These changes will have a significant effect on Greek producers, since there is little scope for subsidies through the national budget and they are the most dependent on subsidies, without having tried to adapt to market needs the way their counterparts in the northern EU countries have. Greece also has a huge, by European standards, agricultural population: about 17 percent of the total population (against 4.5 percent in the EU), contributing 7.1 percent of the country’s total gross domestic product (1.8 percent in the EU).
