131,000 landowners get one tenth of EU’s annual budget

Nearly one tenth of the entire EU budget went in annual payments to the owners of just 131,000 farm holdings in 2014, according to economist Alan Matthews.

He said the landowners earned far more than the entire EU budget for security and citizenship.

And their direct payments for the year cost about €4.7bn more than the entire €9bn EU administration budget.

The CAP Pillar 1 direct payments enriching them were originally introduced to compensate farmers for reduction in intervention support prices, following the MacSharry reforms in 1994.

These payments are still in place, variously justified as addressing low farm incomes, a necessary support for EU food security, a safety net for farmers against unexpected market shocks, or compensating for higher regulatory standards and ensuring more sustainable farming.

Writing in the capreform.eu blog, Mr Matthews, Professor Emeritus of European Agricultural Policy in the Department of Economics at Trinity College, said paying so much without any obvious benefit to the EU taxpayer is clearly wrong.

“Production on the land farmed by these large, well-structured holdings is not at risk, if these payments were not made,” he said.

“EU direct payments simply serve to underpin the value of this land, a value which has greatly increased in recent decades, to the benefit of a relatively small number of people who are the beneficial owners of this land.

“This must be changed.”

His analysis of the EU Commission’s statistics on the distribution of payments showed the highest paid landowners (those getting more than €50,000 per year each) soaked up about 33% of the EU’s farm direct payments, averaging about €105,000 each per year.

He said just over one-quarter of these highest paid landowners are in France, with many of the remainder in Germany, the UK, Spain and Italy.

But there are also significant numbers in some of the newer member states, where large agribusiness companies now operate the holdings of former state farms and large co-operatives, in states such as Hungary, Poland, Bulgaria, the Czech Republic, Romania and Slovakia.

Best paid were 1,511 landowners in Slovakia, averaging €243,573, according to Matthews, who is a former President of the European Association of Agricultural Economists.

Next came 3,034 landowners in the Czech Republic, at €235,236, followed by 161 in Croatia, at €213,273; and by 47 in Slovenia, at €205,830.

Well behind, but fifth best paid of those getting over €50,000 per year, are 4,110 landowners in Hungary, at an average of €161,609.

But France had by far the biggest number of those paid over €50,000 per year, with 36,255 averaging €75,966.

Germany had 15,346 averaging €132,561; Spain had 13,634 averaging €97,494; Italy had 10,743 averaging €106,938; and the UK had 14,705 averaging €98, 406.

The figures for Ireland show 2,112 landowners getting more than €50,000 of CAP Pillar 1 direct payments in 2014, averaging €74,288.