Guarding the Pork Barrel Germany Opposes Attempts to Reform EU Agricultural Subsidies
The European Commission wants to reform the Common Agricultural Policy, which eats up almost half of the EU's budget and which primarily benefits large farms in "old" member states. But Germany and France are resisting moves to change the system so it favors smaller, organic farms. The status quo suits them very nicely.
An old cobblestone road leads to Carl-Albrecht Bartmer's property. Small, detached houses line Lindenstrasse in the village of Löbnitz an der Bode, near Magdeburg in eastern Germany. A light blue Trabi, the iconic East German car, sits parked by the side of the road.
Bartmer, 49, is an ardent marathon runner and has his hair parted meticulously to one side. After the collapse of Communism, he took over an agricultural cooperative formerly run by the East German government, on a piece of property that had belonged to his family before World War II. Bartmer, who has a degree in agricultural economics and is also president of the German Agricultural Society, cultivates nearly 1,000 hectares (2,500 acres) of land, work for which he requires no more than four employees. He doesn't like the word "farmer," however, preferring to be called an "entrepreneur." Bartmer believes that those who work in agriculture need to take advantage of technological progress to produce food for a "hungry world" under conditions of "fair competition" and with as little state aid as possible.
It's interesting that Bartmer argues in favor of independence from the state, since the landowner collects 300 ($400) in subsidies from the European Union for each hectare of his land. That adds up to a total of around 300,000 -- per year.
Exporting EU Carrots to Russia
The road that leads to Janusz Sakowicz's farm is also paved with cobblestones. The 60-year-old lives in an old house in the community of Choroszcz in northeastern Poland, near the Belarusian border. Sakowicz, a short man with blue eyes and large hands, inherited seven hectares of land from his father in 2002, but the soil was too poor to support crops and the local dairy paid only a pittance for milk from his cows. "We couldn't make a living from that," he says.
A German foundation helped Sakowicz and his wife Teresa set up a small organic cheese dairy. The couple produces a smoked cheese, a cheese with herbs and one with garlic. They sell their wares to gourmet shops in the nearby city of Bialystok and to private customers who come to buy from the farm directly.
The Sakowiczs receive aid from Brussels too, but Sakowicz considers the EU's agricultural policies unfair. He can't understand why farmers in neighboring Germany receive twice as much money as he does for every hectare of land they work. He's similarly amazed that his neighbors collect premiums for land they own but don't cultivate. And he watches Belgian trucks pass through Poland, on their way to deliver carrots to Russia with the help of EU export subsidies. "How can they compete with our cheap products?" Sakowicz wonders. "There's something completely out of balance here."
Few topics carry such a tradition of controversy within the EU as the Common Agricultural Policy (CAP). That's no surprise -- a lot of money is at stake. Around 56 billion -- nearly half the entire EU budget -- flowed from Brussels into European agriculture in 2009.
Inefficient and Unfair
Negotiations over agricultural policy reforms are scheduled to begin in the first quarter of 2011, and they're likely to involve tougher haggling than ever before. It's already apparent that there will be less money available in total starting in 2014, while the European Parliament will have an equal say in these negotiations for the first time, thanks to the implementation of the Lisbon Treaty.
Many, including Berlin and Paris, want things to remain as they are. Both governments are influenced by a powerful agricultural lobby. Others would rather do away with state aid entirely. Only one thing is certain: There hasn't been a convincing reason for the flood of subsidies from Brussels for a long time. The system is not only inefficient and unfair, but also has a dubious environmental impact.
Currently, farmers in the "old" EU member states receive, on average, three times as much in direct payments per hectare as their Eastern European neighbors. The amount in France is twice that in Hungary, while it's four times as much in the Netherlands as in Slovakia. The leader of the pack is Greece, where farmers collect more than 10 times as much per hectare as their counterparts in Romania. Additionally, the larger a farm is, the more subsidies it can pocket.
EU Agriculture Commissioner Dacian Ciolos from Romania has proposed an ambitious package of reforms. Ciolos wants to
- redistribute funds from the old to the new EU member states,
- slash subsidies for large-scale operations, instead supporting active farmers and small farms and
- link direct payments more closely to environmental protection requirements.
Ciolos' opponents were lining up before the commissioner had even publicized his proposals. Germany and France issued a joint statement arguing for "European agricultural competitiveness" and against environmental requirements tied to subsidies. Both countries also insisted there should be no "redistribution between member states."
- Part 1: Germany Opposes Attempts to Reform EU Agricultural Subsidies
- Part 2: Like Paying Drivers for Stopping at Red Lights