Ecofriendly subsidies proposed

EU plans to give more weightage to environmental and public safety norms by amending agricultural policy

Published: Thursday 15 August 2002

Incentive for green farming pr The European Union (eu) has proposed to amend the 40-year-old Common Agricultural Policy (cap). Under the proposal, subsidies will be granted to farmers on the basis of their observing public health, safety and environmental norms. This is in contrast to the existing system wherein farmers receive sops on the basis of their produce and farm size.

The recent proposal is in response to the European Commission's poll conducted among 16,041 eu citizens. Its results showed that 90 per cent of the participants opted for a policy in favour of safe food and healthy environment as opposed to the prevalent one.

eu agriculture commissioner, Franz Fischler proposed that farmers would be offered a maximum one-time payment of us $299.902 a year which will be based on their previous income. At present farmers are paid according to each produce, which could be several times in a year. The plan aims to revise the existing cap which grants more subsidies to those farmers who have increased production. Instead it proposes to grant subsidies to those farmers who observe environmental and public safety norms during cultivation.

Though the total subsidy will not be slashed, the new proposal is expected to save around us $ 198 million by 2006. "There will be some savings but it's mainly a question of spending money in a more rational way without incurring more costs," Fischler is reported to have said.

Though farmers comprise only five per cent of the total work force in the eu, consumers pay an estimated us $472 a year on subsidies for agriculture. cap consumes us $39 billion, which is almost half of the union's entire budget. Not surprisingly, farmers in the eu get around 35 per cent of their income from subsidies as compared to 21 per cent in the us and one per cent in New Zealand. cap was introduced in the 1960s to benefit the poor farmers in Europe and to promote food security. As the latter objective was achieved in the 1970s, surplus produce was either destroyed or dumped at very low rates in developing countries.

The new proposal has, however come under severe criticism from France and Spain, which are the biggest beneficiaries of cap. Unlike countries such as Germany, Britain and the Netherlands, which get fewer subsidies than what they pay, France and Spain are farm intensive countries and benefit more than the others.

For countries like India, where subsidies amount to only us $1 billion, the proposal would still lead to unfair competition from highly subsidised imports from developed countries. Bibek Deb Roy, director, research, Rajiv Gandhi Institute for Contemporary Studies, a Delhi-based body working on issues related to sustainable development, too envisages a grim future: "For developing countries like India, cap will continue to create a market access barrier on the country's agricultural exports." Under cap, eu imposes levies on agricultural products from non-eu nations through its external tariff.

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