France Signals Real Change in Agriculture Policy

Historic talks designed to give the EU's much-maligned common agricultural policy (CAP) the biggest overhaul in its 40-year history began yesterday with signs that France may, for the first time, be willing to sanction change.

The policy has become a byword for greed, waste and fraud and with 10 new countries due to join the EU next year, officials know that its generous subsidy regime must be scaled back if the EU is to stave off bankruptcy.

It has been reformed before but the latest attempt by EU farm ministers in Luxembourg aims to do away with production-linked subsidies, the regime's most controversial element.

France, the EU's biggest food producer and the £30bn-a-year policy's biggest beneficiary, had, until now, signalled that it would accept only a superficial makeover.

But, according to the French press, Jacques Chirac told his German counterpart Gerhard Schröder before yesterday's talks that Paris - which has one million farmers to appease - was willing to see some, but not all, of the policy's production-linked subsidies scrapped from 2006.

It was unclear last night which of the proposed changes they were willing to accept.

The reform proposals on the table would ensure that milk and wine lakes remain things of the past, and do away with the production-linked subsidy regime altogether.

Future subsidies would instead be conditional on farmers respecting the environment, animal welfare and food safety.

Some, but not all, of the protectionism which campaigners say is responsible for pricing out poor farmers in the developing world would also be dismantled, and the surreal practice of paying EU farmers to leave their fields fallow would be scrapped.

But campaigners argue that Franz Fischler, the EU agriculture commissioner who drew up the proposals, should have gone further.

"The CAP reform on the table stinks of industrial agriculture," said Joanna Dober of Friends of the Earth Europe.

"If you take off the green wrapping [of the agreement], inside there is a black hole, meaning nothing for the environment and nothing for the poor."

The CAP eats up half of the EU's entire budget. It currently costs the average family of four £9 a week, while 70% of the subsidies go to only 20% of Europe's largest farms, and the average European dairy cow has a bigger annual income - thanks to EU subsidies - than half the world's people.

Even with France's apparent change of heart, pushing through Mr Fischler's proposals will be an uphill struggle.

Ireland, and a number of southern European countries which do particularly well out of the current arrangements, are loath to sanction radical change.

The CAP is the result of an agreement between Germany and France that dates back to 1957, and benefited French farmers and in return, German manufacturing industry.

France and others will square off against Britain, Germany and a clutch of northern European countries such as Sweden and the Netherlands, who want the most radical reform possible.

Mr Fischler warned that the moment of truth had finally come. "It is decision time," he said.

"Our agricultural policy needs reform and we need it now. What we want is a long-term, modern and sustainable aid policy, in the interests of farmers, consumers and taxpayers alike."

"There is a lot at stake and the consequences of failure ... would be dire."