EU negotiators to hammer out deal on farming subsidies | Business| Economy and finance news from a German perspective | DW | 24.06.2013
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EU negotiators to hammer out deal on farming subsidies

EU officials have gathered in Luxembourg to finalize reforms of the 27-member bloc's agriculture policy, with the emphasis being on subsidies. Negotiators said many sticking points still needed to be addressed.

The Luxembourg meeting scheduled for Monday and Tuesday brought together the bloc's agriculture ministers plus representatives from the European Commission and the European Parliament. Negotiators said they intended to agree on the likely shape of the EU's farm reform, which was to replace the 50-year-old common agricultural policy (CAP).

Many proposals under discussion are meant to make EU farming more environmentally friendly. There is agreement already that 30 percent of future direct subsidies will be conditional on farmers taking steps to improve their environmental performance. However, the precise measures required to qualify for subsidies in this sector and sanctions for non-compliance, remain one of the many sticking points during the current talks.

Agriculture will consume nearly 40 percent of the bloc's 960-billion-euro ($1.3 trillion) budget for 2014 to 2020, making it once again the biggest single item of EU expenditure.

Major hurdles

Some governments, including France, are out to water down moves to harmonize subsidy payments based on the current size of holdings rather than on historical production levels as at present.

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A time of change for agriculture

The current system disproportionally benefits those who have the largest output. The changes proposed by Brussels could eventually see some of Europe's biggest grain and livestock farmers lose up to 40 percent of their previous subsidies.

Another sticking point is a cap on annual payments to individual farms which both the European Parliament and Commission say should be 300,000 euros. But governments are against such a ceiling.

"European farmers expect us to reach a deal this week, and we'll do our best to deliver," Irish Agriculture Minister Simon Coveney said ahead of the meeting in Luxembourg.

His German counterpart, Ilse Aigner, agreed that farmers needed planning security. "But on some issues, we're still worlds apart," she conceded.

hg/jr (Reuters, dpa)

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