Europe Gets Innovative about Farm Subsidies

Farm & Countryside Commentary by Elbert van Donkersgoed

Editor's NOTE

This column was adapted from one of Elbert van Donkersgoed's weekly radio chats, called Corner Post, which are aired weekly on CFCO Radio in Chatham and CKNX Radio in Wingham, Ontario. Elbert is the Strategic Policy Advisor of the Christian Farmers Federation of Ontario, which is working hard to create a more satisfying and sustainable model for farming in the province. If you'd like to receive a transcript of Elbert's Corner Post address each week, send an email to evd@christianfarmers.org with SUBSCRIBE as the message.

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March 7, 2003: When British and French farmers agree on an issue, it's worth investigating. Back in January the European Commission published its latest proposal for reforms of the European Union's Common Agricultural Policy. These latest
proposals clearly cut farm production subsidies.

French farmers were the first to forcefully reject the plan. France profits more from farm production subsidies than any other European Union country.

British farmers declared that the new policy does not fit in the United Kingdom. They too reject the reduction in production subsidies but focus their criticism on the proposal to reduce the aid payments according to farm size. Larger farms face bigger percentage cuts, and the UK's farm size is much bigger than most of Europe.

But this latest plan for reform, which "happens" to cut production
subsidies, has a much bigger agenda.

The most significant goal is a simplified, efficient administration by the European Commission of what all the member states do in the name of the Common Agricultural Policy.

The reform proposes a single farm payment, independent of production and based on the average of whatever subsidies a farm received during the previous three years. No lengthy application forms backed by proof from satellite imagery and animal passports to show how much land is in production or how many animals are kept. Just a single farm income payment. Easy administration.

A second innovation is just as dramatic. It is a response to the
long-standing criticism of the Common Agricultural Policy: that productionsubsidies divide farmers from their markets, suppress innovation, and destroy economic and environmental value.

The new payments will be linked to respect for the environment, food safety, occupational safety and countryside stewardship. As long as a farmer keeps his land in agricultural condition, the farmer will continue to receive the single farm payment, irrespective of the amount of food produced. Farmers who deliver an attractive, healthy countryside will be rewarded, making the environment a selling point, not a sore point, for the sector.

The rationale for this major shift in European farm policy has been building for a decade. Production subsidies paid to farmers under the Common Agricultural Policy are now seen as part of the problem rather than the solution. A new guiding principle has emerged: use public money to pay for public goods that the public wants and needs.

This is an innovative approach to agricultural subsidies. Will Europe's environment benefit? No doubt. I am skeptical, however, of the claims by European politicians that their new approach will reduce over-production. Total subsidies for European agriculture and the countryside are not declining. Farmers, with their ingenuity and entrepreneurship, should not be underestimated.


Corner Post can be heard weekly on CFCO Radio, Chatham and CKNX Radio, Wingham, Ontario. Corner Post is archived on the website of the Christian Farmers Federation of Ontario: www.christianfarmers.org. To be added to the electronic distribution list of Corner Post, send email to evd@christianfarmers.org with SUBSCRIBE as the message. To remove your name, send email with UNSUBSCRIBE as the message.