November 20, 2008


EU strives on farm subsidies reform


EU farm ministers are working hard to reform the farm subsidies, which would further break the link between subsidies and production.


About 90 percent of EU farm subsidies, which cost more than US$50 billion per year, are currently disconnected from production, but the European Commission proposed in May to remove the remaining connected payments with only a few exceptions.


Aid to farmers will be linked to environmental, animal welfare and food quality standards. Farmers who do not adhere to the rules face subsidy reductions.


The EU ministers also need to agree on the permanent abolition of arable set-aside and a gradual increase in milk quotas before they are abolished in 2015.


In last September, the Commission had proposed to temporary drop EU rules that require grain farmers to leave 10 percent of their land uncultivated amid a bad harvest and higher food prices.


The European Parliament on Wednesday (November 19, 2008) called for a smaller cut in farm aid and a limited increase in milk quotas, as well as a special aid for milk producers and livestock farmers.

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