EU

Agriculture policy reform agreed

Article published on the 2008-11-20 Latest update 2008-11-20 15:23 TU

Tobacco growers burn their product in support of calls to keep subsidies
(Photo: Reuters)

European Union countries agreed reforms to the Common Agricultural Policy (CAP) on Thursday, despite minority opposition. The main changes are cuts in subsidies linked to farm production and the phasing out of milk quotas. But the size of the CAP budget has yet to be discussed, promising more heated debate in 2013.

"We have reached a near-unanimous accord," said French Agriculture Minister Michel Barnier. France at present holds the EU's rotating presidency.

But British officials described the decision as "a lost opportunity" to make more radical reforms. Latvia is reported to have opposed the agreement because it felt it was unfairly treated in comparison to other countries that have recently joined the EU.

Germany said that it almost joined the opposition but finally accepted the deal as the best it was likely to get.

The principal change, which continue reforms made in 2003, involves reducing subsidies whose size is decided by the production of the farm receiving them.

They will be cut by ten per cent, with large farms which currently receive 300,000 euros a year, bearing more of the burden than smaller ones. Germany calculates that its farmers will lose about 240 million euros a year.

Savings will be used to fund environmental protection and the revitalisation of rural areas.

Milk quotas are to be reduced by one per cent a year until they are scrapped in 2015. Italy wanted to scrap them immediately because of growing global demand for dairy products but other countries argued that could lead to a sharp fall in prices.

The reduction of subsidies is not as speedy as the European Commission wanted.

"The global financial crisis demonstrated the need to preserve regulation and governance," including in the CAP, in order "to have a high-producing agricultural sector," said Barnier.