The changed draft budget is still unacceptable for the Agricultural Chamber, though. The ministry’s draft budget for 2009 reckoned with 10.3 billion koruna after this year’s 15.6 billion koruna. The reason are the government’s efforts to cut state budget deficits. Gandalovic said that refinancing of a loan for Czech water management projects from the European Investment Bank (EIB) together with other reserves in co-financing of European programs should cover roughly a half of the planned 5 billion koruna cut. “Roughly 2.5 billion koruna in farmer subsidies will really be cut and the second half will be found within our ministry,” Gandalovic said.

Agricultural Chamber president Jan Veleba rejected Gandalovic’s proposal. He wants direct payments for farmers for next year to be kept. “We have the right to 90% in direct payments, 90% of what farmers get in Austria, Germany and France,” he stressed. If the ministry cut the 5 billion koruna gap in the budget to roughly a half, farmers would get some 15% less in direct payments than they demand. “We will thus return to the times when we were much less competitive than farmers abroad,” Veleba said. “It is impossible to believe that we are able to turn minus 5 billion koruna into zero, this is unrealistic,” Gandalovic said. The Agricultural Chamber has set up a crisis staff owing to the draft state budget for Czech agriculture. “We will prepare some measures. I cannot specify them now, but they should not be anything dramatic…,” Veleba said earlier.

Czech farmers got some 23.5 billion koruna in subsidies last year. Mainly thanks to contributions from national resources and the EU, Czech agriculture last year ended with a profit which, according to preliminary data, reached 13.7 billion koruna, roughly twice as much as in 2006. (Prague Monitor)