13 December 1996

Cut farm gate prices as EU enlarges, say MEPs

FARM gate prices should be cut to world levels to allow for costs of enlarging the EU to the east, Euro-MPs urged this week.

A new report from the Strasbourg-based budget committee says that, unless radical adjustments are made to the Common Agricultural Policy, the costs of enlargement could exceed £9bn in 2005.

Applying existing EU subsidies in eastern Europe would only create large agricultural surpluses. As such, any pre-accession strategy for these countries should be carefully planned and concentrate on improving infrastructure.

In a second report out this week, the European Parliaments agriculture committee rejected the Commissions option of developing the 1992 CAP reforms further.

While the current regimes have managed to cut surpluses, they have resulted in too much red tape and unfair subsidies. Any new CAP must be based on the principle of subsidiarity, with policies regionalised as much as possible, say the MEPs.

The report says current aid payments and herd limits should be abolished, with farmers paid instead for environmental and ecological services.