NEWS | Wednesday, 21 May 2008

EU shake-up on farming subsidies

The EU has unveiled a plan for reform of its Common Agricultural Policy, the rural payments system that costs more than €40 billion a year.
The proposals are aimed at making farmers more responsive to market forces amid rapidly rising food prices.
They aim to scrap milk quotas and give farmers incentives to look after the countryside rather than producing food.
EU agriculture boss Mariann Fischer Boel wants to minimise the distortion to food markets the subsidies create.
The draft policy requires approval by all 27 EU member states and the European Parliament.
The plan calls for milk quotas to be gradually increased, then scrapped by 2015.
But the biggest change would be to progressively cut subsidies to wealthy farms, and shift the money saved to protect and promote traditional family farms.
For 2009, subsides for farms receiving €99,999 would be reduced by 7%, and by 16% for those receiving more than €300,000 a year.
The funds would be used by member states to invest in environmentally-friendly programmes, including renewable energy sources and water management.
The amount of land a farmer has to own to be eligible for aid would also rise. At the moment, that stands at 0.3 hectares, less than the size of a football field.
The Commission says the administrative cost of dealing with the smallest properties is often more than the subsidy itself.