France fears EU to crop farming aid

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The last working document published by the EU's Cypriot presidency has sparked fears in France that the new EU budget will slash direct subsidies to farmers, despite the country's firm opposition. reports.

October will mark the second year of formal negotiations for a new Common Agricultural Policy (CAP). France, the largest beneficiary of the CAP, has battled since the beginning for a budget identical to that of 2013 for each year of the period 2014-2020.

The lack of clarity in recent budget negotiations had offered the country a ray of hope.

French unhappy

But to French chagrin, the Cypriot paper hinted it might revise the budget for subsidies downwards.

"The presidency remains convinced that it is inevitable that the total level of spending proposed by the Commission, including the internal elements as well as the external elements of the Multi-annual Financial Framework 2014-2020, will be revised downwards", the document said.

Keeping agriculture intact would therefore present difficulties, since it currently receives the largest slice of EU funds.

The French minister for European affairs, Bernard Cazeneuve, admitted as much on 24 September, suggesting the fate of the EU budget could not be separated from that of national budgets.

Cazeneuve expressed his "great unhappiness" at reading the paragraph (52) which makes reference to a fall in agriculture subsidies, while not specifing by how much: "The average amount of EU direct payments per hectare will be reduced by [X% to Y%] per year from fiscal 2015 to fiscal 2020", the document says.

Technical repercussions

France strongly rejected the paragraph, Cazeneuve said. The minister considers that the CAP budget is "already the most abused". To Paris it is therefore out of the question to consider a reduction to the proposals made by the Commission, which stipulated €281 billion in direct aid over the period 2014-2020.

An EU source told "this adjustment has always been present, but it was much less clear before."

With negotiations ongoing, the pressure on France is mounting. Paris could find allies amongst member states from the 2004 enlargement, which still need funds to modernise their agricultural industry. But some work will have to be done.

"There is not yet a group dynamic", the source said. "The Cypriot presidency negotiates a European budget lower than the wishes of the Commission, everyone's going to have to make an effort."

Changes to the EU budget could have repercussions in some areas of the reform, including direct subsidies for environmental measures.

"Member states have a certain flexibility in their choice of ecological measures. To finance these practices, Member states will use [X to 30%] of the annual national ceiling", the new framework says.

The figure, 30%, represents a downward revision. By reducing constraints in that amount, negotiators hope to reduce the impact of subsidies cuts for farmers.

Launched in 1962, the Common Agricultural Policy (CAP) is a system of EU agricultural subsidies and programmes that marks the biggest single budget outlay for the EU. The parliament's current discussions on the future CAP are a precursor to jockeying over the farm-support programme.

If approved as proposed, the 7-year, €435.6-billion programme would account for nearly 40% of EU's spending. Of that, €317.2 billion would fund direct payments to farmers under Pillar 1 of the CAP.

The Commission’s proposals to expand green space one hotly contested issue, with farm organisations and their advocates in Parliament claiming this would create more bureaucracy. Others contend that reducing cultivatable land at a time of high food prices and rising global demand does not make sense.

About 70% of CAP spending goes to direct payments for farmers, 20% of the budget is spent on rural development measures, and the remainder is handed out as export subsidies to food companies. France, Germany, Spain, Italy and Britain are the biggest beneficiaries.

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