Big changes in new CAP

The government’s decision to completely separate subsidies from the amount of most farm products produced is likely to reduce overall production amounts as well as bring about an overall decrease in Greece’s farming population, officials say. For as Minister for Agricultural Production and Food Evangelos Bassiakos has often said, Greece has the European Union’s largest percentage (19 percent) of people working in agriculture. He believes this figure is too high and needs to be reduced. Cultivation of some crops will be reduced, since farmers who produce cereals, tobacco and oil will receive the average of the subsides they received between 2000-2002 (and 1999-2002 for oil), without being required to keep cultivating. Some may well avoid the expense of growing altogether, hoping to profit by selling their products. The Organization for Economic Cooperation and Development (OECD) predicts a further fall in farm product prices over the coming decade due to greater competition from developing countries, as Bassiakos himself has said. Growers will simply continue to receive the money essentially free of charge for their status as farmers, for as long as the EU is willing to pay. However, this might not be for very long. Already there is talk of bringing forward the review of the Common Agricultural Policy (CAP) set for 2009. One wonders who will be willing to demand money for farmers who are not even producing. Bassiakos says that in the next negotiations we will not be the only ones, as many other countries have also chosen to separate subsidies from quantities produced. This government did not initially opt for complete separation. A tough battle was waged in April 2004 to keep the EU from imposing it. For some products in particular, such as tobacco, complete separation will bring about the eventual disappearance of the crop, according to all concerned. When Deputy Minister Alexandros Kondos, originally a supporter of partial separation, was asked why Greek tobacco did not sell this year as buyers moved to other markets, he admitted that it was largely due to the fact that the separation scenario had been leaked for some time. Cotton, seeds A considerable percentage (35 percent) of subsidies for cotton remains linked to production. This was set in April 2004 at the insistence of producers, who judged it would be in their interest financially. So it appears that cotton crops will survive this transition for the time being, but not without some changes in the sector. Perhaps the most revealing comment regarding the effects of complete separation is the ministry’s statement on subsidies for seeds – the only produce for which subsidies are still fully linked to production: «(This) has been decided given the importance of the sector for Greek farming, in order to support Greek seed production and reduce seed imports.» There were many reasons for this, the main one being pressure exerted from all sides. Parliamentary deputies, unionists, and officials in cooperatives, whether affiliated with the ruling New Democracy party or with the PASOK opposition, prefer to address themselves to farmers who receive a specific amount of money every year (meaning between the end of December and June). At the same time, complete separation means the immediate – and painless – writing off of past irregularities, when production was often far overstated. Meanwhile the administrative structure, according to ministry officials, was not up to the task of determining such a complicated system of subsidy percentages. This way everyone is happy: farmers, who will be getting something for little effort, and the politicians, who will be able to blame market forces when prices start to fall.

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