EU battle underway over billions in farm handouts

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Britain, France and Germany Tuesday staked out their positions ahead of an impending showdown over reform of the EU's controversial policy of agricultural subsidies.

The European Commission, the executive arm of the EU, plans to present its proposals for a reworking of the Common Agricultural Policy in November and a new CAP is to come into effect on January 1, 2014.

But the CAP, which provides billions of euros (dollars) in subsidies for food production and currently accounts for around 40 percent of total EU spending, is a major source of tension.

Britain leads a small group of nations opposed to what it sees as a costly system of subsidies to bolster an inefficient farming industry.

It has long called for a cut in EU farm spending to free up funds for other areas such as efforts to boost economic competitiveness, leaving farmers to deal with the rules of the market.

Britain's new agriculture minister, Caroline Spelman, on Tuesday told a meeting of EU farm ministers in Merida, southwest Spain, that London wants to see "a reduction and reorientation" of spending in the CAP.

Britain faces strong opposition from France, which has pledged to defend the CAP from deep cuts.

France, which received 9.5 billion euros under the scheme in 2009, is the main beneficiary of CAP subsidies.

French President Nicolas Sarkozy said earlier this year he was ready to risk provoking a "crisis" in European relations in his efforts to defend French farmers from the dismantling of the CAP.

French Agriculture Minister Bruno Le Maire on Tuesday said Paris is working with Germany on a joint position that will be ready later this year.

Germany, the second largest CAP beneficiary, wants "to fight side by side with France," said his German counterpart, Ilse Aigner.

But the two countries differ over regulations to protect farmers from market fluctuations, which Le Maire described as a "non-negotiable" point.

"On regulation, the French are going further than us," said a member of Aigner's entourage.

Paris and Berlin also want to form an alliance with Poland to better confront Britain.

But Poland, which received 2.03 billion euros in subsidies last year, is one of the new EU states which feel they have been badly treated under the distribution of subsidies, based on traditional criteria of the older EU nations.

The EU's agriculture commissioner, Romania's Dacian Ciolos, said the traditional criteria for subsidies are "today unjustified."

Le Maire said "we are ready to revise traditional criteria, it is already a real opening" toward Warsaw but added that the main issue was "how far to go and at what speed."

Aigner hoped that a redistribution in favour of the newer EU states should be as gradual as possible in order to avoid any "too sudden" loss to farmers.

The reforms aim to make European agriculture more competitive in the world market as the continent faces pressure to reduce its subsidies for the sake of poor farmers from the developing world.

Spain, as the EU's rotating president, has just launched negotiations on a free trade pact with the Latin American bloc Mercosur despite objections by a number of countries led by France.

Some 4,000 farmers demonstrated outside the site of the conference in Merida, accusing the Spanish government of failing to keep its promises to the sector.

© 2010 AFP

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