08 December 1998
‘CAP reform cost could soar’

THE European Court of Auditors has warned member states that the costs of reforming the Common Agricultural Policy could rise well beyond the expected budget.

The auditors criticise proposed CAP reform, claiming it contains few innovations and is not sufficiently wide-ranging.

They also criticise the European Commissions forecasts on world prices and the demand for agricultural products.

Rich farmers stand to gain too much out of the changes and total spending should be cut, the auditors say.

The auditors are concerned that price guarantees for European arable crops will be below world market levels, meaning that extra costs of intervention would have to be borne by EU authorities.

They also find fault with the way agricultural subsidies are structured regardless of profitability, whereas self-sufficiency should be a goal for competitive farmers.

The auditors want the EU to consider an upper limit on subsidies to large farms.

Farm spending accounts for nearly half of the EUs budget of Ecu85 billion (£60bn).

The cost of the reforms have become critical in recent discussions between member states with some, notably net contributors like Germany, urging a reduction.