Difficult reforms

Over 40 percent of the entire EU budget flows into the bloc's agriculture industry. This money is used most of all to support the income of farmers, but it's also meant to help continue developments of the struggling industry.

It's no big surprise, then, that EU member states are fighting for these funds, 50 billion euros to be exact. But it's not just about money. Agriculture policy comprises economic, social and environmental aspects, and representatives from these groups are looking to have their say as well.

And, EU agriculture policy is now decided exclusively at the European level, which gives actual teeth to any changes put forth by Brussels. Agriculture Commissioner Dacian Ciolos is looking to use his proposed reforms to promote environmental concerns, above all: "I can guarantee that we will write a new Green chapter. Without sustainability, any new agriculture politics will be unthinkable."

Trimming the hedges

In concrete terms, this means that Ciolo intends to impose environmental conditions on the allocation of funds in future. For instance, the aim to make seven percent of fields currently used off limits, which has angered Germany's agriculture minister, Ilse Aigner. She argues that Germany can't make such a closure in the face of increasing demand for agricultural goods.

But it's also the general pressure to make spending cuts that could endanger Ciolo's ambitious plans. David Baldock, who heads the Institute for European Environment Policy, told DW that if Brussels decides to cut EU agriculture subsidies, this "could very well be at the cost of the environment, and this would counteract the very reforms that are being made."

Baldock also believes that the aim of reducing the intensity with which fields are used will be "very difficult" to implement. "It's absolutely necessary that we take steps to protect the environment, our landscape, biological diversity and water quality, but unfortunately this is not profitable for our farmers," Baldock pointed out, adding that Ciolos failed to take these matters into account in his reform plans.

Farmer West is not the same as Farmer East

The dispute also extends to the way in which the EU funds are distributed among the member states. Before, the EU demanded that there be a fixed price for all products based on the amount produced. This is what gave rise to the mounds of butter and seas of milk that were destroyed in order to keep the price for each product at a constant. Today, farmers are paid directly according to the surface area of the fields on which they produce - irrespective of how much they produce.

This has fallen into the hands of strong agricultural member states like France and Spain. But they were given competition with the eastern expansion of the EU in 2004 - when the Czech Republic, Poland, Slovakia, Slovenia, among others - joined the bloc.

To this day, however, a Polish farmer is paid less for each square meter of field than a French farmer is. Hervé Guyomar, who heads the French Institute for Agricultural Research, says this is because the price level in older EU states like France is higher. "You wouldn't be able to pay a farmer in France per hectare what you pay a farmer in Poland; it wouldn't be justified."

There are currently no plans to equate the price levels of EU states. If the levels should ever be equated, then it appears that western countries like France will ultimately receive the prices that eastern countries like Poland are currently receiving. For there are several EU countries less strong in agriculture - for instance Great Britain - who see the subsidies as a waste of money to begin with.

Golden age for agriculture?

But how does the international community view the EU's agriculture policy? The Organization for Economic Cooperation and Development (OECD) has provided a positive assessment of the bloc's recent efforts. Ken Ash, who's responsible for the OECD's trade and agriculture directorate, reminded in his assessment of the situation in the mid 1980s, when prices for produce were over 70 percent higher than the global standard. Today, that difference is only at seven percent.

But the OECD representative is less amused by the EU's policy of paying per surface area, which in Ash's eyes rewards only large-scale producers. He argues that Brussels should bring about a fundamental structural change, "away from the supporting of income and more in the direction of long-term investments that result in increased productivity, sustainability and competitiveness."

Ash sees a golden age for agriculture coming, based in large part on the rise in global demand for produce: "In the current market environment there are enormous chances for farmers. We haven't seen anything like this in the past hundred years of falling prices!"

But such positive statements aren't heard all that often in Brussels these days. And while the EU considers once again intervening in the market, farmers are complaining about milk prices they say are too low.

Author: Christoph Hasselbach, Brussels / glb
Editor: Andreas Illmer