Farming giants reap most of EU's benefits

[Gerrard Winstanley]

Farming giants reap most of EU's benefits
http://observer.guardian.co.uk/business/story/0,,2030928,00.html

Heather Stewart, economics correspondent
Sunday March 11, 2007
The Observer 

Europe's costly system of farm subsidies is becoming increasingly 
skewed towards giant agri-businesses. Ninety firms in the UK are each 
banking more than €500,000 (£340,000) in taxpayers' cash in a single 
year, new figures from Brussels reveal.

Jack Thurston of Farmsubsidy.org, which campaigns for full disclosure 
about who gets what under the Common Agricultural Policy (CAP), 
calculates that 85 per cent of the €32.5bn handed out in direct 
payments went to just 18 per cent of Europe's farmers in 2005.

The new data also show the raw deal the eastern European accession 
states received when they joined the EU in 2004. Their farmers could 
initially claim only a quarter of what their French or German 
counterparts get, and they will receive full entitlements only in 
2025.

Poland's farmers, many of whom survive on low incomes, received only 2 
per cent of the farm payment budget, while the French agricultural 
sector took 23 per cent, and in Germany 720 farms banked over €500,000 
each.

'This shows that the CAP is an unjust system, not only in terms of the 
negative impact on farmers in developing countries, but also in terms 
of the equality of distribution within Europe,' said Amy Barry, trade 
campaigner at Oxfam. 'I think lots of taxpayers think about it as a 
sort of welfare system; but for it to be supporting the farmers that 
really need, there would have to be quite significant reform.'

The Commission claims that the CAP has already undergone radical 
reform, with many payments now 'decoupled' from the amount of food a 
farm produces in order to reduce their distorting effects on the 
market. But Barry argues that the unfair share of taxpayers' cash 
gobbled up by giant producers showed reform had made little real 
difference.

'These figures reinforce the scepticism many people have about what's 
really changed,' she said.

Agricultural subsidies are the most controversial issue in long-
running World Trade Organisation negotiations, with many countries 
accusing the EU - and other rich trading blocs, including the US and 
Japan - of being unwilling to lower trade barriers to farmers from 
poor countries.

Trade Commissioner Peter Mandelson, who negotiates at the WTO on 
Europe's behalf, met his Indian and Brazilian counterparts in London 
last weekend to try to kick-start negotiations, but even if a radical 
deal is struck, there are doubts that US President George Bush could 
win support for it in Congress.