European Union negotiators agreed on the 27-nation bloc’s future common agricultural policy, after two years of discussions on how to spend what may total 373.2 billion euros ($485 billion) over seven years.
Paolo De Castro, chairman of the European Parliament’s agriculture committee, confirmed a deal after farm ministers from the 27-nation bloc reached consensus overnight. The ministers’ plan to trim payments above 150,000 euros for a single farm were left out of the discussions with parliament and the European Commission on disagreement, De Castro said.
The EU’s common agricultural policy will set the direction from 2014 to 2020 for farmers who produce 20 percent of the world’s wheat, milk and pork, 11 percent of its sugar and beef and account for 30 percent of global cheese exports. Agriculture would make up 39 percent of the EU’s total budget of 960 billion euros proposed for 2014-2020.
"You’ve got a policy that’s relatively cheap, which people are somewhat attached to and that could cause a lot of trouble when you try to get rid of it," said Jack Peerlings, associate professor of agricultural economics at the University of Wageningen in the Netherlands. "So there’s no great pressure to really do something drastic."
The EU pays farmers a fixed amount of direct aid for every hectare (2.4 acres) they tend, as well as subsidies tied to rural development or environmental measures such as preserving rows of hedges. The accord is 1,350 pages long. "It’s going to take a long time to convert this into national legislation," Stephane Le Foll, France’s agriculture minister, said at a press conference in Paris today after returning at 6 a.m. from talks in Luxembourg.
Direct payments amounted to 40.9 billion euros last year, on a total budget for agriculture and rural development of 57.6 billion euros, provisional data from the bloc show.
The direct payments make up the biggest chunk of proposed future spending on the common agricultural policy, budgeted at 277.9 billion euros for the seven years through 2020. Spending on direct payments is projected to fall to 37.6 billion euros in 2020 from 41.6 billion euros next year, according to EU proposals. The figures are in 2011 prices.
"You see that instead of prices, the incomes of farmers are supported," Peerlings said. "Over the past 30 years, there’s been liberalization. In small steps, support for agriculture has been reduced."
The countries of the EU had about 12 million farms in 2010, with an average size of 14.3 hectares, according to EU statistics service Eurostat. That compares with 2.2 million farms in the U.S. with an average size of 418 acres, U.S. government data show.