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Last Updated: Tuesday, 20 November 2007, 13:28 GMT
Aid cuts for Europe's big farmers
EU Agriculture Commissioner, Mariann Fischer Boel
Mariann Fischer Boel says it's time the CAP had a health check
The European Agriculture Commissioner, Mariann Fischer Boel, has announced plans to reduce funding for Europe's biggest farmers.

Anyone currently receiving more than 100,000 euros (71,000) as part of the Single Payment Scheme would have their aid capped.

The proposals come as part of a "health check" for the 49.8bn euro (35bn) Common Agricultural Policy (CAP).

Farmers in the UK, Germany and the Czech Republic would be most affected.

Simplifying the system

The commissioner says the Single Payment Scheme which was introduced in 2003 should be simplified. Its original aim was to replace the subsidies linked to the amount of food a farmer produced, a change described as "decoupling".

Does... the health check imply the patient is sick? Certainly not
Mariann Fischer Boel
European Agriculture and Rural Development Commissioner

Announcing the proposals, Ms Fischer Boel said the reforms four years ago had modernised the CAP but it was time to move the review forward.

"Does the fact that we are conducting a Health Check imply that the patient is sick?" she said.

"Certainly not: but it's quite normal for perfectly healthy people to visit their doctor to see whether they need to do anything different to ensure they stay in good shape."

The 2003 reforms were brought in when the European Union had only 15 members and the commissioner is keen to make "market support instruments" still relevant now that the EU's membership has expanded to 27.

In the past, those supports involved quotas and public intervention. Ms Fischer Boel says it is now time to consider how to create "the right intervention system - one which works as a safety net".

Capping the CAP

Under the proposals, which have been announced at the start of a six-month consultation, the direct payment received by farmers would be capped according to the amount of aid they receive.

  • up to 100,000 euros - unaffected

  • 100-200,000 euros -10% cap

  • 200-300,000 euros - 25% cap

  • above 300,000 euros - 45% cap

    Such a system would naturally target the larger landowners and the commissioner says it would have to differentiate between multiple-owner farms with many workers and single-owner farms with just a few.

    At the other end of the scale, a minimum level of payments could be set before aid kicks in, although the commissioner says it would not affect "real farmers".

    Climate change

    EU agriculture expenditure by country

    Ms Fischer Boel says that the money saved in reduced direct payments should help fund what she considers to be the CAP's new challenges such as tackling climate change and managing water more effectively.

    In the 1990s, farmers were told to leave 10% of their land fallow in an attempt to curb cereal prices. Now the commission has suggested that the compulsory set-aside rule should be abolished.

    It accepts that steps would have to be taken to ensure that the current measures taken to preserve the environment are not affected.

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