Magazine article Newsweek International

Planting the Seeds; Brussels Pushes EU Farmers toward the Free Market

Magazine article Newsweek International

Planting the Seeds; Brussels Pushes EU Farmers toward the Free Market

Article excerpt

Byline: William Underhill

Picture a European farmer: he's a bloated subsidies junkie who gets more money from the taxpayer than from the market. Indeed, he owes almost his entire wealth to the European Union's notorious Common Agricultural Policy, which swallows almost half of the Brussels budget. Worse, the lavish payments encourage him to overproduce, creating hefty surpluses to be dumped on the world market at artificially low prices.

So much for the caricature. These days the EU is prodding farmers toward the real-world marketplace. That's why, in a gesture to free-trade critics, it's scrapping a key element of the CAP. After Jan. 1, most farmers will receive a flat-rate annual payment--one no longer linked to the sheer quantity they produce. The logic: they won't have to turn out tons of unwanted food anymore just to attract generous subsidies. "This is revolutionary," says Derek Wilkinson, chief economist for Britain's National Farmers Union. "For the first time farmers will be free to focus on what the market really wants."

The new regime won't do much to cut the EU budget. (Any savings will be largely redirected toward rural development.) But to qualify for the new payments, farmers must meet new standards on animal welfare and maintaining the countryside. That means preserving the landscape in the unspoiled state preferred by the eco-conscious European public. Whatever the cost, Tuscany must still look like Tuscany. Where there's little prospect of profit, some farmers may choose to abandon production altogether and just take their cash as custodians of the land. …

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