Pesonen believes direct payments to farmers should be maintained in the future Common Agricultural Policy (CAP), which the European Commission will start reviewing in November.
But he says payments should be redirected to "active farmers" rather than non-farming landowners.
"Copa-Cogeca has clearly said that we would like to have a CAP that is directed at active and entrepreneurial farmers who produce food and services," Pesonen told EurActiv in an interview.
"This means that landownership as such cannot be, and should not be, a basis for any kind of payment," he went on.
Indeed, current practice seems to dictate that landowners increase their rents according to changes in CAP support schemes, he suggested.
Pesonen believes this is unacceptable: instead, "changes in the support schemes should be linked to the services and activities on the farm," not landownership.
CAP money driving up price of land
Jack Thurston, co-founder of framsubsidy.org, an NGO which tracks CAP beneficiaries, agrees. "If you own a lot of land, you get a lot of money from the CAP, it's rather automatic," he told EurActiv in an interview earlier this week.
According to Thurston, large beneficiaries of the CAP currently include rich landowners like the UK royal family, Prince Albert of Monaco, the Duchess of Alba in Spain or the German aristocracy. What's more, non-EU landowners may also benefit from CAP funding, Thurston said, with Crown Prince Hans-Adam II of Liechtenstein receiving €2 million for his farm holdings in Austria for example.
Pesonen acknowledged that CAP subsidies, like other economic activities, had tended to drive up the price of land.
In fact, the link between subsidies and land value was strengthened by the 2003 CAP reform, which tied some payments to the provision of environmental "public goods" and "services" on the farm.
The policy overhaul, spearheaded by former Farm Commissioner Franz Fischler, comprised decreasing subsidies for the production of particular crops and linking some of the payments to conditions related to environmental protection, food safety and animal welfare.
Mark Thomasin Foster, former president of the European Landowners Organisation (ELO), told EurActiv last year that increasing payments to farmers for providing environmental services "would increase the rental value of land" and thus boost landowners' income as a result (EurActiv 02/12/09).
Fischler is now chairman of the RISE Foundation, a non-profit group promoting rural conservation and renewal, which was founded by the ELO.
Farmers hampered by green goals
Regarding the delivery of environmental "public goods," Pesonen warned that farmers risk being overburdened with additional tasks while Europe opens its markets to third country imports.
"The reality is that European farmers simply cannot compete with the standards that are applied in third countries," he said.
"We have to have a level playing field with regards to what EU citizens expect and what the farmers are required to do," he added.
If future CAP money is redirected to environmental goals, it might simply add to the cost of food production in the EU and further weaken farmers' ability to compete, Pesonen warned.
To read the interview with Pekka Pesonen in full, please click here.
