EU Debates Farm Subsidies

The European Union, whose leadership is scheduled to hold final budget talks next week, is currently locked in a transnational struggle over farm subsidies and agricultural spending, a fight that is threatening to derail budget negotiations.

At stake is the future of roughly 40 percent of the overall EU budget for the next six years. Farm subsidies and farm spending consumes about 60 billion Euros, an enormous chunk of the EU’s overall spending for an industry that employs only 6 percent of EU citizens and generates only 2 percent of the EU’s gross domestic product.

Many non-agricultural states in the EU have been pushing to reduce farm subsidies, claiming that the EU needs to trim down its spending while focusing on economic stimulus that could help bring Europe out of a major recession. Eastern European nations, whose major economic productivity revolves around farming, have been pushing for increased farm spending (as has agricultural powerhouse France).

One of the major sticking points appears to be what kind of farm spending EU farmers can expect in the future. For years farm subsidies have been distributed as direct payments to farmers. However, the EU Commissioner for Agriculture and Rural Development, Dacian Ciolos, has been pushing for major reforms, arguing that subsides should be linked to environmentally friendly practices and sustainable agriculture. This plan would significantly increase environmental regulations, a move that many farm producers (like Germany) strongly oppose.

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Written by: Justin Ellison / Farm Plus Staff Writer