Farmers misled on cost of CAP reform

23 July 1997

Farmers misled on cost of CAP reform

The European Commission has misled farmers on the true cost of reforms to the Common Agricultural Policy outlined last week, says Europes chief farmer group.

COPA – which is an amalgam of European farmer unions – said the EC gave the impression its proposals on agriculture in the Agenda 2000 will result in an increase in the EU agricultural budget to compensate farmers for the substantial cuts in commodity prices.

In fact, a closer look at the Commissions proposals reveals that it has in fact allowed for no growth whatsoever in CAP expenditure in real terms between now and the year 2006, the COPA statement says.

COPA says the ECs method of quoting agricultural figures in current prices when it quoted other budgetary figures in constant prices and real growth distorted the true cost of the CAP cutbacks.

The group claims agricultural expenditure will have to fall by 12% in real terms over the next nine years if there are to be sufficient funds to pay the ECs CAP reforms. The net cost of the reform proposals was quoted at 4 billion ecus.

Not only is the EC proposing that farmers only be partially compensated for the substantial commodity price cuts, it is also expecting the net cost of this compensation to be paid by decreases in the existing agricultural budget. This means that the price cut compensation to farmers would be paid on the cost of the farmers themselves, COPA says.