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Monday 19.03.2018 | Name days: Jāzeps

Milking the budget - EU prefers rich farmers

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Even in times of severe austerity, The European Union (EU) spends too much funds subsidising already wealthy farmers, The Economist reports.

It is added that as EU leaders kicked off their latest budget fight at a summit on November 22, one thing was clear: the EU will go on spending disproportionate sums on farmers.

There are no signals the common agricultural policy (CAP) could change. Worse, the CAP favours big producers over small ones, and rich western countries over poor eastern ones, the portal writes.

It is also added that the EU still spends some 40% of its budget on agriculture, an industry that generates less than 2% of GDP and employs less than 5% of the workforce. No other group of workers gets such coddling. Steel, coal and shipyard workers lost their jobs en masse when uncompetitive industries slimmed down; car workers are now following suit.

Leaders say that subsidies are meant to support public benefits (maintaining the landscape, looking after the environment) and to reduce rural poverty, as well as guarantee food security and quality.

But it seems that these things are topical, for example, in Belgium or the Netherlands that still earn three or four times as much support as a hectare in the Baltics.

It is stressed that a more sensible EU policy would end direct subsidies and limit the EU’s role to policing common environmental, food-quality and animal-welfare standards. Brussels could help finance research into farming or non-farming rural employment. But much farm support ought to revert to national level, with strict rules on competition and state aid.

The Economist adds that the latest compromise budget proposal presented by Herman Van Rompuy, president of the European Council stretches out the timetable to equalise (partly) payments per hectare.

As reported previously, the majority of the European Parliament (EP) understands and supports the goals of Baltic States to increase direct agriculture payments and the preservation of the current volume of European structure funds in the next budget planning period, said EP President Martin Schulz.

“The volume of direct payments to the Baltics is a disgrace to the whole European Union. I Have given my word to Baltic farmers and government leaders to support them and I shall,” – Schulz noted.

As it is known, Latvia’s request to Brussels is about providing fair and objective direct payments to all EU farmers at least at 80% of the average EU level. Direct payments to Latvian farmers are currently the smallest ones in the EU: payments do not exceed 63 LVL on average per ha, while the average EU level is 266 EUR (186 LVL) per ha.


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  1. Oddis says:

    This was a nice cut and paste from The Economist, but with no reference…

    Thumb up 0 Thumb down 0

  2. Jil says:

    I can see “The Economist” in two places and neither is it copy-paste for all the text. Have you read the story at all?

    Thumb up 0 Thumb down 0

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