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Battle lines form over plans to redirect EU farming subsidies

Stephen Castle
Thursday 23 January 2003 01:00 GMT
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The fight to reform the EU's €42bn (£27.6bn) agricultural policy began in earnest yesterday when the European Commission outlined plans to shift subsidies away from big farms and promote environmentally-friendly agriculture.

The proposals, which will be opposed by France, would sever the link between cash grants to farmers and their output, ending the over-production that has in the past led to mountains of unwanted food.

Instead, farmers would be given a single payment based on the size of their farm, rather than production, but linked to their ability to meet standards of food safety, environmental protection and animal welfare.

The package was welcomed by the UK and will be backed by reformers in Germany, Sweden, Denmark and the Netherlands. The Government sees it as a vital element of Europe's next round of negotiations in the World Trade Organisation.

A British official said the plans generally went in the right direction, although the Government was concerned that the burden of reform could fall more heavily on some member states, including the UK.

However, Oxfam attacked the plans, arguing that the package would not end the dumping of dairy products, sugar and cereals on developing countries, and dealt a serious blow to small farmers and Europe's environment.

Reshaping the Common Agricultural Policy is highly sensitive and prompted a clash between Tony Blair and the French president, Jacques Chirac, at a summit last year, when the Prime Minister accused Paris of protecting its farmers at the expense of those in the Third World.

Mr Chirac is opposed to any significant reform of the CAP before 2006. France sees cutting the link between subsidies and production as unacceptable on principle. Whether it has enough allies to block the reforms will become clear next week when agriculture ministers meet in Brussels.

The European Commissioner for agriculture, Franz Fischler, said: "Farmers can count on new EU support to help them to adapt to demanding EU environmental, food safety and animal welfare standards and to promote quality food and traditional products."

Under the proposals, direct payments to big farms will be scaled down gradually from 2007, to free up money to develop the EU's poorest farming regions. Cuts will also be made in the EU's fixed pricesfor food such as cereals and milk.

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