19 February 1998
Farmer fears over CAP reform proposals

CONTROVERSIAL plans to reform the Common Agricultural Policy (CAP) will enable European Union countries to choose how they allocate billions of Ecus of Brussels aid to farmers for the first time.

The new proposals will be welcomed by some member states, but attacked by others because it paves the way for a renationalisation of the CAP and a phasing out of subsidies.

It would mean handing over discretion on nearly Ecu3 billion (£1.9bn) a year of beef and milk subsidies. This is expected to soften opposition to overall CAP proposals which the Commission plans to announce on March 18.

Initial drafts would give states control over 30% of compensation payments for beef and dairy farmers.

Agra Facts, a Brussels-based newsletter, says this would give countries a fund of Ecu1.9bn a year for beef farmers and Ecu910m for dairy farmers. Member states would have to meet Commission criteria for distribution but they would be able to allocate funds according to their own priorities.

Farmers fear this will distort markets since some will receive lower payments for animals or crops in certain countries than in others. They also fear it might set a precedent for other areas of CAP authority to be handed over to countries in subsequent reforms.

The Commission is also seeking a larger cut in milk support prices – 15% instead of the 10% announced last summer. Officials are also considering the possibility of an increase in milk quotas.