Portugal's farmers face uncertain future

By Alison Roberts
in Lisbon

Most Portuguese farms are small

Despite undergoing major reforms over the past 20 year, Portugal's farmers are facing major challenges as they seek to overcome high land prices and an outdated quota system.

Portugal was the only EU member state whose agriculture minister voted against the Common Agricultural Policy (CAP) reform package last month.

EU farm ministers agreed sweeping changes to farm subsidies paid under the CAP after a marathon all-night negotiating session.

Portugal's farm minister cited inadequate milk quotas for dairy farmers in the Azores islands, one of the EU's poorest regions, as his country's reason for opposing the new deal.

But there are other issues causing concern to Portuguese farmers too.

Pensioner farmers

Portuguese farming has undergone huge changes since the country entered the EU in 1986.

The labour force almost halved in 20 years, as farms mechanised.

CAP reforms were hard-fought

But structural problems of tiny farms and an elderly workforce remain: 85% of farms are less then five hectares, and 70% of farmers are over 55.

The lack of viable farms limits opportunities for young people to enter farming, while land prices are high.

The reforms agreed in Brussels will not solve those problems.

Left out

And the EU still offers nothing for Mediterranean products such as olives and wine, says Luis Mira of the Portuguese Farmers' Confederation.

He says the Commission has promised to turn its attention to vegetables and fruits and other products important to Mediterranean farmers.

But he remains sceptical about whether the Commission will do anything.

Other Portuguese farmers have different worries.

The Azores are windswept and poor

Fernando Albino grows grapes on his farm in the Alentejo region, as well as cereals on several hundred hectares of land.

He says he would happily give up subsidies if there were a free market, but no authorities would ever deregulate the production of essential foods such as grain, milk and meat.

He is more worried about plans to decouple subsidies from production, so that in future payment will be based on historical output levels, not actual production.

Poor public image

That, he says, means the public will continue to believe that farmers are pampered.

"All the people think farmers are the kings of the world because they receive from all people subsidies. This is bad for us farmers," he says.

But the main long-term issue for Portugal is that present and therefore future payments are linked to quotas. Portugal's quotas were set in the 1980s when agriculture was less developed.

The problem is acute in the Azores islands, the mid-Atlantic islands where dairy farming is the main economic activity. It was the only region in the EU to see its future quotas cut.

Islanders' woes

Eugénio Quental produces 620,000 litres of milk on his farm on the island of São Miguel. He says farmers are being punished for boosting productivity as they were told to, while prices have stagnated.

Portugal's farms need major reforms

"What's been happening in recent years is that we've been given incentives to modernise and invest and grow," he says.

"And the increase in production in the Azores is a reflection of that. Because seven or eight or nine years ago we produced half the milk we do nowadays," he adds.

Portugal still hopes to win some increase in the Azores' quota.

But further down the road, its farmers also worry about talk of renationalising agricultural policy, with responsibility for subsidies returned to the government.

Any EU decision to switch responsibility for farm subsidies back to member states would be bad for Portugal "because it's a poor country, it doesn't have money", says Mr Mira.

Many of Portugal's farmers are pleased about the new stress on environmentally-friendly farming.

They will benefit as few of them practice intensive farming.

But here as in other EU countries, the main problem is uncertainty about the future.