France seeks more time to recover millions in farm aid

6th August 2009, Comments 0 comments

French agriculture minister did not suggest a new deadline but said it needed "a matter of months" to recover the money.

Paris – France on Wednesday demanded more time to work out plans to recover hundreds of millions of euros in state aid from its farmers after the European Union deemed the subsidies were illegal.

The European Commission earlier extended the deadline for action until 29 September but French Agriculture Minister Bruno Le Maire said in response that this would not be enough to deal with Brussels' demands.

"We need a new deadline," Le Maire told AFP, adding that experts asked to sort out the payments were engaged in a "long and complex" undertaking that required time.

A senior European Commission official said in turn that the European Union was willing to extend the deadline but would not budge on the principle of repayment.

"We accept the timeline ... The case is extremely complicated and we'll take the time that we need," the official told AFP on condition of anonymity.

France has been asked to recover some EUR 330 million that it paid out to fruit and vegetable growers between 1992 and 2002 at the same time the EU was handing out support payments to the farmers.

The EU executive had initially set a deadline of 29 July for France to outline a plan for recovering the funds but French farmers' unions have already warned they will not pay back the money.

The agriculture minister did not suggest a new deadline but said it was "a matter of months" before the issue could be sorted out.

"There's no questioning of the fact that this was unlawful aid," said European Commission spokesman Amadeu Altafaj in Brussels.

"It's going to be difficult to get back the aid from the producers but the prime responsibility lies with those who have actually set up a system which establishes a kind of parallel common ... market," he added.

Le Maire triggered a storm on Monday when he told the Le Parisien newspaper: "We will have to launch proceedings to be reimbursed by the farmers."

With interest, the bill to refund the subsidies will come to around EUR 500 million, a sum which farmers say could bankrupt them.

Some farmers have also gone out of business since receiving the subsidies, further complicating the question of clawing the payments back.

Le Maire has not specified the amount that the state would be seeking in payback but said there would be a case-by-case study to ensure that struggling farmers were not driven into bankruptcy.

French farmers' unions have warned they will not pay back and promised they will take to the streets if the government forces them to reimburse the funds.

At a meeting with the farmers this week, Le Maire promised to address their concerns and a new meeting was planned for Thursday to try to calm the situation.

France, the biggest beneficiary of the EU's Common Agricultural Policy (CAP), has been rapped for systematically granting farmers funds that were intended to help them cope with short-term crises in the fruit and vegetable market.

Appointed just six weeks ago, Le Maire has been criticised for his allegedly clumsy handling of the issue.

"You can't just declare like that, to people who are already having great difficulty: 'You have to repay EUR 500 million," said Socialist deputy Genevieve Gaillard.

A fellow member of Le Maire's ruling UMP party, Jacques Le Guen said: "When you're minister for agriculture you must approach things in the spirit of defending farmers' interests."

AFP / Expatica

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