The EU should reform its farm subsidy system by moving away from direct payments to producers towards a simpler system used by many of its newest members, Poland’s farm minister said on Thursday.
The European Union’s Agriculture Commissioner Mariann Fischer Boel will soon propose changes to the mammoth Common Agriculture Policy, which consumes some 40% of the EU’s entire annual budget.
Poland and seven nations that joined the EU in 2004 opted for a flat rate system known as the Single Area Payment Scheme (SAPS) that distributes funds according to land area from a single pot of cash. The rest of the EU, except for Romania and Bulgaria, uses a far more complex payment system. “After 2013, a more simplified system of payments based on land area that is now applied to Poland could apply to all of the EU because administering it is much cheaper than in the system of payments to producers,” Polish Agriculture Minister Marek Sawicki said in an interview. Sawicki said a common system would be fairer to all European farmers by creating a level field to boost competition. “We have often emphasized that CAP should be similar for all members, creating the same conditions for all,” he said. Critics have charged that the hefty EU subsidies boost already high food prices, favor larger farmers in older EU countries and support inefficient production.
Some officials also fear that in less developed countries like Poland the scheme keeps small farmers in business, preventing the necessary consolidation. Sawicki said a fragmented farm sector was not a major concern, but added he backed Fischer Boel’s push to reduce handouts to larger farms, with bigger percentage cuts for higher overall subsidies in a tiered system of income thresholds. “So far money mainly has gone to larger farmers, increasing the disproportion in the Polish countryside. We should consider directing the funds to help mid-sized farms,” Sawicki said. But opposing another proposed CAP reform, he called for a more extensive use of cereal storage to prevent spikes in grain prices, which surged last year and contributed to higher cost of food.
Fischer Boel’s suggested limiting the EU’s safety-net public storage system for cereals, apart from wheat, and making EU countries spend more of their farm cash on countryside projects. (Reuters)