Louis Michel's slogan. What value should we attach to the Tony Blair slogan that it is absurd for the EU to spend 40% of its budget on a declining activity which only concerns 5% of the European population? When asked about this, European Commissioner Louis Michel replied that agriculture directly concerns not 5%, but 100% of European citizens. Of the two exaggerations, I much prefer Louis Michel's. Agricultural activity fulfils the requirements of civil society (multifunctionality) and should be maintained throughout the territory of the Union. This was the conclusion of the European Council of December 1997 (see this column yesterday). What we should be asking ourselves is quite simply this: is current expenditure excessive? And is the money being used advisedly?
Too much money? This is the view that Jean-Claude Juncker put forward to the European Parliament on 22 June, as president-in-exercise of the European Council: "the budget for research is being compared to the budget for the common agricultural policy. But you cannot compare like with unlike. The CAP is the only genuinely Community policy which is paid for entirely out of the European budget. Research is a national policy supported by the Union budget. Under the proposal of the Presidency, the CAP would have cost 305 billion EUR for the whole of the period in question (2007-2013). The public research policies of the Member States of the EU would have cost 524.5 billion EUR over the same period, if national policies had stayed at the same level. If the Presidency's proposal had been accepted for the EU budget and if the Member States honoured their commitments under the revised Lisbon Strategy, expenditure for research would have reached a level of 785 billion EUR by 2013; and I'm talking about the State's share of the research budget. So let's stop talking nonsense about this business". Mr Juncker went on to prove that CAP expenditure is on a constant downward curve. The 2006, aid to farmers and market measures (i.e. genuine agricultural expenditure) were set at 42 billion EUR; the Presidency compromise for the period 2007-2013 would have brought these down to 35 billion in 2003, which is a fall of nearly 17%. "In 1986, agriculture absorbed 68% of the European budget. I have proposed that it should represent just 37% in 2013. This is quite some progress. How obstinate one must be not to see this!". Mr Juncker continued: "in fact, the CAP would have been the only sector to see its expenditure drop considerably, whereas future-oriented expenditure would all have been increased".
Nationalising expenditure? In order to free up extra money for other policy areas, the idea was mooted to nationalise a proportion of agricultural expenditure. My opinion is that this is possible only if the "national" proportion of credit is limited, certainly to less than 20% of the total. Beyond that, the principles of multifunctionality and of maintaining agricultural activity everywhere on the continent would be demolished, because some of the Member States would be able to meet the costs, and others would not. How, then, would we be able to ensure price uniformity for the consumers and uniform protection of the natural environment? Crops would be more or less protected, depending on the available national budget, and the common policy would be unmanageable.
Subsidising the Queen of England? If the overall volume of Europe's expenditure on agriculture is not unreasonable, we should be asking ourselves if the money is well spent. The answer to this is clear: there is a lot of needless expenditure and wastage (yesterday, I pointed out a few examples of these) and as a whole, the CAP has done a lot more to benefit big business and big landowners than those who live on the land and make a living from farming. Export subsidies were, for a long time, a source of partly unjustified gains and even today, some beneficiaries are in a position which might be seen as excessive. The way the benefits are shared out is still unfair, very much in favour of the big players; but the responsibility for sorting this out now mainly falls on the shoulders of the Member States. In 2003, the Commission proposed a ceiling of 300,000 EUR on European subsidies per holding; the Council threw this out. According to unofficial figures, of the major beneficiaries receiving over 300,000 EUR a year in 2001 (the statistics are old ones), around 30 were in France, but some 330 were in the United Kingdom (led by the Queen, with 800,000 EUR). If it was these figures that were behind Tony Blair's calls for reform, I could almost understand his attitude. A British prime minister cannot directly attack the monarchy, but he might think: if this is how the CAP money is being distributed, we must change the system is a matter of urgency! But the British situation is one all on its own. An effort to explain this aspect, and maybe a couple of others, might not go amiss. See you tomorrow. (F.R.)
Session of the European Parliament