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Wednesday, 22 January, 2003, 18:46 GMT
Europe unveils farm reform plans
British shepherd
Brussels wants farmers to get flat-rate payments
The European Commission has unveiled plans to reform the system of paying subsidies to farmers, despite strong opposition from France and other nations.

Agriculture Commissioner Franz Fischler is trying to revolutionise the subsidies system - axeing the traditional link between subsidies and the level of food production.

Dear farmers, we are not going to abandon you. Nobody is going to abandon you

Franz Fischler
Agriculture Commissioner

Instead, farmers would receive a single payment which would be reduced over time.

The Commission's proposals unveiled on Wednesday adopt most of the ideas first put forward by Mr Fischler in July.

Under the plans, bigger farms would fare worse than smaller ones - meaning the plans face strong opposition in countries with larger farms, including the UK.

FARM REFORM PLANS
Break the link between subsidy and output
Cut subsidies year by year, starting in 2007
Divert some of the freed-up cash into rural development
Focus on consumers as well as farmers

France - the biggest winner in the farm subsidy stakes - is also opposed to changes which would hit its many small farmers.

But Germany has argued strongly that changes to the system are needed before the fresh wave of EU members joins, many of them with large agricultural sectors.

The two countries, to the anger of the UK, struck a deal last October putting off wholesale reform until at least 2013, and the proposals put forward by the Commission are seen an attempt to find the middle ground between the opposing viewpoints.

Jacques Chirac and Gerhard Schroeder
France and Germany have met half way
But heated debate is expected next week when the plan goes before EU farm ministers. It is expected to take months for agreement to be reached.

The Common Agricultural Policy (CAP), seen for years as a sacred cow, costs around half the EU's budget of 95 billion euros.

But Mr Fischler says its existence in its old form could no longer be justified.

The changes would also boost Europe's negotiating position in world trade talks, he added, sparing it from allegations that it unfairly boosts European farm produce on world markets.

Franz Fischler
Fischler says farmer and consumers stand to benefit
The traditional linking of subsidy and output led to Europe's notorious wine lakes and butter mountains, as farmers were led down the path of mass production regardless of whether there was a market.

But supporters said it played an essential role in keeping the farming sector afloat, and warned that abandoning farmers to market forces would send many into freefall.

Mr Fischler insisted that farmers would be among those to benefit from scrapping the link - and denied claims that farmers suffer or would be paid to produce nothing.

"Incomes would rise as a result of these market reallocations...and this is not accidental. It's hard to see how this could mean paying farmers to do nothing," he added.

Some of the better ideas have been watered down and the worst features retained.

Oxfam spokesman
Environmentalist groups are opposed to the proposed changes - saying they fail to live up to promises to help the rural environment.

"The positive elements have been significantly weakened, farm gate prices will be decreased, and there will be hardly any more money for rural development and organic farming," said environmental group Friends of the Earth.

Mr Fischler hopes the reform can be agreed by the end of the current Greek EU presidency in June, and will take effect next year, aides say.

But it won't be without a fight.

If these proposals are accepted, it would be a devastating financial blow to Britain's farmers, heaping more misery on a suicidal community

Neil Parish
UK Conservative MEP
"If these proposals are accepted, it would be a devastating financial blow to Britain's farmers, heaping more misery on a suicidal community," said UK opposition Conservative MEP Neil Parish.

"We have said all along that the deal struck between Schroeder and Chirac would cost jobs in Britain, and here is the evidence."

'Dumping'

Development groups are also firmly opposed to the plans, saying they will do little to ease the struggle of farmers in the developing world and could derail the world trade talks.

"The European Union's agricultural reform proposals are a big disappointment," said Oxfam spokesman Kevin Watkins.

"Some of the better ideas have been watered down and the worst features retained.

"The current proposals will do nothing to end EU dumping on poor countries and could de-rail the whole Doha Development Round."

 WATCH/LISTEN
 ON THIS STORY
European Agriculture Commissioner Franz Fischler
"The result will be a better balanced market"
The BBC's Mark Ashurst
"Helping farmers in the European Union's biggest job"
See also:

25 Oct 02 | Business
30 Oct 02 | Politics
25 Oct 02 | Business
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