10-year cash delay for new EU joiners
10-year cash delay for new EU joiners
By Philip Clarke
FARMERS in central and eastern European countries will have to wait 10 years before they receive full direct income payments, under new enlargement proposals released in Brussels this week.
As expected, just over half the k10bn (£6bn) for agriculture in the first three years will be spent on rural development measures, with suitable projects getting up to 80% EU funding. Another k2bn (£1.23bn) will be available for market supports.
But, in an attempt to appease the 10 candidate countries, the commission has also offered to pay 25% of the direct income aid given to current EU farmers in their first year of membership. This would rise to 30% in 2005, 35% in 2006 and 40% in 2007, then accelerate to reach 100% by 2013.
The new members may also pay their own national top-ups during the 10-year transition period, provided the total support does not exceed the level of aid in existing member states.
"Enlargement would fail if we were not to make some concessions in this field," enlargement commissioner, Gunter Verheugen, told the European parliament on Jan 30.
To simplify the scheme, the commission suggests this money be paid as a flat rate area aid to all farms above 0.3ha (0.74 acres) for the first three years. This would cut bureaucracy, be easier to verify and break any link with production.
Candidate countries have reacted with dismay to the proposals, demanding the same subsidies from the day they join. But Mr Verheugen denied they were being sold short. "In terms of relative purchasing power we are offering them equal treatment."
To pay them full area aid would be counter productive, added farm commissioner, Franz Fischler. "It would only slow down restructuring and it could prove socially divisive."
The NFU believes this is the right approach. "It makes sense to integrate the new members slowly," said Brussels director, Betty Lee.
Concerns that paying even reduced direct aids to the new members might lead to cuts for existing EU farmers have diminished, as the costs of the new proposals are still within the framework set under Agenda 2000.
This allowed the EU to spend up to k42.5bn (£26.2bn) on enlargement from 2004 to 2006. The total cost of the new proposals comes to k40.2bn (£24.7bn).
The proposals will now be sent to member states. The aim is to agree terms with the new members by the end of this year. *