Czechia to ‘CAP’ EU funds for large agrarian companies

Among the largest EU beneficiaries of agricultural funds is Czech-based Agrofert holding, whose beneficial owner is Andrej Babiš. [Shutterstock/btwcapture]

The future cabinet will bring a shift to the country’s farm policy by capping EU subsidies and focusing on small and medium-sized farms, effectively putting an end to the EU subsiding large agricultural companies, something the outgoing government of Prime Minister Andrej Babiš fought hard in the past years to ensure.

“We support redistributive payment and caps on subsidies for the largest companies,” states the coalition agreement signed by the future Czech government to be formed by the conservative coalition SPOLU (ECR+EPP), Mayors and Independents (EPP) and Pirates (Greens/EFA).

Among the largest EU beneficiaries of agricultural funds is Czech-based Agrofert holding, whose beneficial owner is Andrej Babiš. According to a study published by the European Parliament in May 2021, Agrofert and its subsidiary companies receive around €30 million yearly.

However, the problem of a small number of large companies receiving a majority of EU funding is not only the Czech case. Around 80% of the EU’s agricultural budget goes to the largest 20% of farmers.

The previous European Commission’s proposal to set mandatory limits on EU agricultural direct payments was softened during negotiations. Czechia was among the most vocal Member States, strongly opposing any limits on EU subsidies for large companies. That appears to have ended with the new government.

“We will revise the Czech position to the EU’s Common agricultural policy,” the future government wrote in their statement.

According to the reformed Common Agricultural Policy (CAP), Member States will probably not be forced to cap the funding, as the measure will remain voluntarily. EU lawmakers will cast their final votes on the new CAP during next week’s plenary session.

Czech MEP Veronika Vrecionová (ECR), a member of the conservative coalition SPOLU, thinks that the EU should gradually cut direct payments in upcoming years. In a recent debate organised by EURACTIV.cz, she said that EU subsidies should be granted only for environmental protection or rural development activities.

(Aneta Zachová | EURACTIV.cz)

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