2010 – A challenging year for the Common Agricultural Policy
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Many voices decry the Common Agricultural Policy as a “black hole” in the European Union’s finances – a void that simply sucks up funds. Reform is up for debate this year, but countries at loggerheads over the best way to proceed, progress is expected to be slow.
In 2009, the amount allocated by the European Union to agricultural subsidies reached 71 billion euros. Yet some of these funds went to companies that turned out to have little to do with agriculture at all.
But things will be different in 2010. This year money wrongly received for agricultural projects will have to be paid back. The European Commission wants 214.6 million euros of funds to be paid back by 18 states where there have been irregularities in the spending of the money allocated under the Common Agricultural Policy.
French farmers have repeatedly protested on the issue of bad management of agricultural funds, even though France benefits from agricultural subsidies worth 10 billion euros a year, the highest level in the European Union.
France will have to pay back 70 million euros and Spain 31.7 million euros. Great Britain, Greece, Hungary, Poland and Portugal will have to return amounts ranging from 10 million to 28 million euros.
Last autumn, 40,000 producers from 8 European countries protested in Brussels, calling for measures to be taken against falling milk. The European Commission decided to grant limited financial aid to milk producers, but did not agree to revise its policy on milk quotas.
France’s National Federation of Agricultural Workers' Unions is one of the most active farmers’ organisations. Its secretary general, Dominique Barrau, explains the problems facing milk producers:
“The prices for agricultural production as a whole don’t match the costs. Costs have increased considerably over the past two to two and a half years. Income is very low. We have three types of demands – short, medium and long term. We are calling for the regulation, harmonisation and organisation of producers.”
As a result of the financial squeeze, farmers, starting with the dairy sector, will be getting their European subsidies early. From in October 2009, they began receiving up to 70% of funding they are entitled to for 2010.
France and the UK are the main countries at loggerheads over reform of the Common Agricultural Policy. The British want subsidies eliminated, while the French want to keep them. Denmark is also in favour of maintaining direct aid, but wants a fairer system that benefits small farms.
Since 2003, the World Trade Organisation has been putting pressure on the European Union’s higher bodies to stop all subsidies and bring agriculture into line with the other industries, claiming the funding distorts the market and cause barriers to trade.
Germany
It's not quite true that "the World Trade Organisation has been putting pressure on the European Union’s higher bodies to stop all subsidies". At issue are only cuts to the more distorting forms of subsidies, while the larger part of the Common Agricultural Policy would continue to escape WTO control.
