EU row on the cards over farm aid reform

08 October 1998

EU row on the cards over farm aid reform

A ROW is brewing between European Union members over plans to “re-nationalise” the £30 billion-a-year Common Agricultural Policy (CAP).

The plans would involve member countries taking over responsibility from the European Commission for financing 25% of all direct aid payments to their farmers.

The aim would be to cut the percentage of the Brussels budget that goes on agriculture – now standing at 50% – and ease the burden on taxpayers in countries such as Britain and Germany which currently “cross-subsidise” farm-dependent nations such as Spain, France and Ireland.

The plan would mean a substantial cut in Britains overall contribution to the EU budget, but it would be obliged to top up payments to British farmers from national funds to levels set by Brussels.

France and Ireland have already threatened to block the move. They say a reduction in their budget contribution towards aid payments would be far outweighed by the extra money they would have to pay farmers.

Britain would gain £280m from the new arrangement, while Germany would be £500m better off. But France would lose £450m, Spain £380m and Ireland £140m.

The commissions idea is contained in the biggest ever review of EU spending policies by Brussels.

British officials have already cautioned that the proposals could mean distortions in the single market, whereby farmers from one country would be more heavily subsidised than those from another.

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