Have CAP arguments ready
There has been farmer outrage here over European Commission ideas on tinkering with the €58bn.
However, there are many in Europe who want to go beyond tinkering and make a case for slashing spending.
There has been financial shock after financial shock in the eurozone in recent weeks.
Shares in Europe’s big banks fell to their lowest in more than two years last week over worries that the eurozone debt crisis could infect the financial system. The global economy offers little encouragement; instead the talk is of double-dip recession.
With spare cash getting scarcer in the EU , it is “shocking” that great reductions in EU expenditure are not being proposed, says the German professor of agricultural economics, Ulrich Koester.
He makes the point that direct payments to farmers were first introduced in 1993 as compensation for possible farm income losses. But farm income prospects are good now, with recent OECD-FAO projections indicating that EU market prices for agricultural produce will rise towards 2020.
He also raises the recent European Court of Auditors finding that direct payments do not help to achieve most of the declared goals of EU agricultural policy, and where they do, the costs are unreasonably high. Instead, direct payments result mainly in an increase in land rental prices and values, according to Koester.
He is also ready for those who say direct payments compensate farmers for sustaining the environment, claiming there is no such relationship, and again quoting the Court of Auditors findings that cross-compliance and sanctions to protect the environment are inadequate.
He has no more time for eastern countries’ calls for levelling direct payments across member states than for Ireland’s outright rejection of recently leaked commission ideas on CAP reform.
Since their accession, eastern countries have experienced politically-dictated farm produce price increases across the board, so compensation is hardly justified. According to Koester, agriculture in these countries will be competitive when new entrants to the sector can earn an equivalent income as in other sectors. No one suggests, he says, that government officials across EU countries should receive the same salaries, for competitiveness reasons.
He shoots down the rural development side of the CAP too, insisting that agriculture, even in the least developed EU countries, cannot be the main driver of rural development, and that much rural development funds are spent inefficiently — with which the Court of Auditors agrees. Many rural development agri-environment measures are an open invitation to corruption, according to Koester, who is a well-respected economist and has served as an adviser to the commission, the European Parliament, the Court of Auditors, the World Bank and various other organisations.
He pours scorn on what he calls the newly invented language such as “greening”, used to justify the continuation of inefficient CAP measures.
He says agricultural politicians are searching for new arguments to use to prevent a reduction in their budget.
They will need strong arguments, especially if German citizens like Koester shortly agree to raise their own borrowing costs and risk their credit rating by taking part in eurozone bonds, which represent a giant transfer of money from financially strong countries into unsound member states.
Then it will be even harder to reject German money-saving ideas which target the CAP.
