21 November 2008

EU Agriculture Ministers agree on CAP Reform

The European Union's Ministers for Agriculture have finally reached an agreement on major changes to the Common Agricultural Policy (CAP).
It follows all-night negotiations in Brussels to review the system of subsidy payments to farmers.

Padraig Walshe (right), President of the Irish Farmers' Association (IFA), has already spoken out against the new agreement and criticised the decision to cut the single farm payment by 5% over five years.

Meanwhile Brendan Smith (left), Ireland's Minister for Agriculture, Fisheries & Food, said that "despite difficult negotiations, it was a good package for farmers in Ireland".

The ministers at the talks agreed to sweep away various established agriculture support schemes, including diverting subsidies from large farms to countryside preservation schemes.

After concessions given by (the Danish) EU Agriculture Commissioner Mariann Fischer Boel (right), most notably to France, Germany and Italy, ministers struck an early-morning deal that still represents Europe's most significant farm reform in five years.

"It was a qualified majority, not unanimity," said an official, who did not say which country or countries in the 27-nation union had not backed the accord during all-night talks.

Apart from long arguing over how much handouts to divert into countryside funding, the main hurdles were how to liberalise the EU dairy sector before milk production quotas expire in 2015. Public purchasing of key commodities - like wheat and the future of the EU's remaining production-linked farm subsidies - where also on the agenda.

All holdings, subject to a basic threshold of € 5000 in subsidies a year, will shift 5% of their EU farm money into countryside projects by 2012, on top of a compulsory 5% already in force. Commissioner Fischer Boel had originally been seeking 8%.
Much of her vision of applying a tiered system of annual income thresholds to shunt subsidies, in progressively higher amounts, from larger farms into rural spending also got diluted.

Instead of three thresholds for farms receiving subsidies, only one will now apply - € 300,000 and higher - where 4% of subsidies will be moved into rural projects by 2012.

The policy revisions will start in 2009 and run until 2013.

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