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Friday, 19 July, 2002, 19:53 GMT 20:53 UK
Farm reforms set to serve EU tax payers
Lake District

Imagine a future where farmers will no longer have to produce milk, or meat or to grow fruit or grain, in order to receive agricultural subsidies.

Leaping lambs
Farmers must make sure their animals are happy
It might seem absurd, but it could soon become reality - at least on some farms - if the European Union's Agriculture and Rural Development Commissioner, Franz Fischler, gets his way.

In an interview with BBC News Online, Mr Fischler said the European Commission wants to make "a closer link between what farmers will have to provide and what they will get in exchange".

Consequently, subsidies should no longer be linked to traditional production, such as the tonnage of corn harvested or the number of animals slaughtered.

Instead, farmers should be paid subsidies to deliver what the people of Europe want: Safe food, a living countryside and a healthy environment.

New targets

It is a radical proposal, but one which the European Commission expects will receive the support of the vast majority of Europe's citizens.

Pumpkin farmer
Farmers would no longer be rewarded for producing large quantities
These days, the argument goes, Europe's consumers worry about whether the food they eat is safe, about the welfare of farm animals and about the environment.

They no longer worry about food shortages, which were in focus when the EU hammered out the Common Agricultural Policy (CAP) which set out to encourage large scale food production to feed the people of Europe.

So as part of its mid-term review of CAP reforms agreed in Berlin in 1999, the Commission has proposed a scheme which rewards farmers who look after the countryside, their animals and the consumer's requirements.

Under the proposal, future subsidies would be linked to farmers' delivery of certain public goods, such as land management, environmental protection, food safety and animal welfare.

"These goods have to be guaranteed also in the future. Without guaranteeing these goods, farmers will not get any direct payments," Mr Fischler explained.

"Farmers who treat their animals badly, pollute their soils or endanger the health of consumers will see their farm money cut."

Forging change

In practice, the scheme would force farmers to change by cutting subsidies to those who do not.

Farmers would see their direct payments cut by 3% a year up to a maximum reduction of 20%.

Rural shop
Consumers want to buy safe food
This stick would be matched with a carrot.

Farmers could retain their original subsidy payments by doing more to meet, for example, environmental and quality standards and by adjusting to the Commission's latest requirements.

The scheme could also forge more harmonised applications of environmental protection and animal welfare rules across the EU.

"This means a certain standardisation, and I think this is necessary," said Mr Fischler.

"This is the weakness of the system of the past.

"There were some member states ambitious to implement the rules, to guarantee good farming practice" while others were less vigorous, he said.

Much resistance

Mr Fischler's proposal has come under fierce attack from both farmers and governments in recent weeks.

His strict focus on consumers' demands has led his critics to suggest that he is championing tax payers rather than farmers.

Not so, insisted Mr Fischler.

"Our constituency is the European society, which means both the farmer and the tax payer.

"If we don't act now, the gap between the opinions and the positions of civilian society and the farming sector will increase.

"It is also in the interest of the farmer to close this gap."

Large losers

Another controversial part of Mr Fischler's proposal is a move which aims to cap the subsidy payments to any one farm at 300,000 euros (193,000; $202,000).

President George W Bush
President George W Bush's Farm Bill: Surely a mistake?
This would hit large farms the hardest and has sparked suggestions that the reforms would penalise agro-businesses.

Again Mr Fischler remained defiant.

"Under the existing system, direct payments have not necessarily arrived where they are most needed, given that 80% of the payments went to 20% of the farms," he said.

He appeared to have little sympathy for large farms which might receive smaller subsidy payments in the future, pointing out that they would still enjoy the benefits of scale economics which many of them have achieved with the help of past subsidies.

"The first objective of farm activities must be to make profits with production, not to optimise farm activities where you can get most subsidies," he said.

Triple whammy

The main objective of Mr Fischler's proposed farm policy reforms would be to ensure that farmers deliver what Europe's people want.

But beyond that, the reforms could deliver a couple of desirable side effects.

For starters, the reforms could give the EU the moral high ground in international trade talks, given that the move away from production-led subsidies could benefit farmers in less developed countries.

As such, the move is widely seen as an effective dig at the US which recently raised its farm subsidies, as stipulated in its recently passed Farm Bill.

"In my view, the new Farm Bill is a step in the wrong direction. It's a U-turn and I think we shouldn't make the same mistake," Mr Fischler said.

The reforms could also make the planned eastward enlargement of the European Union easier.

"In the long run, it is impossible that we have a two-tier agricultural policy," Mr Fischler said.

Though he also stressed that "we should not link enlargement with these reforms because if we do that there's a very good chance that we'll delay enlargement".

 WATCH/LISTEN
 ON THIS STORY
EU farm commissioner Franz Fischler
Our constituency is both the farmer and the tax payer
EU farm commissioner Franz Fischler
The gap between the opinion of civilian society and farmers could increase
EU farm commissioner Franz Fischler
The US Farm Bill is a step in the wrong direction
See also:

10 Jul 02 | Business
10 Jul 02 | Europe
26 Jun 02 | Europe
10 Jun 02 | Business
13 May 02 | Business
10 Jun 02 | Europe
10 May 02 | Business
29 Apr 02 | Business
19 Dec 01 | Business
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