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EU Farms Facing Billions in Cuts

Paris — The proposal by European Union President Herman van Rompuy for additional cuts to the bloc’s farm budget faces resistance from France, the region’s largest food producer, as well as the EU’s agriculture directorate.

Van Rompuy proposes to limit EU spend on farming and rural development in the 2014-20 budget period to 364.5 billion euros ($466 billion), including 269.9 billion euros for market-related spending and direct payments to farmers. The directorate says the plan works out to a cut of 25 billion euros for the bloc’s Common Agricultural Policy.

EU leaders are negotiating the bloc’s budget for the seven- year period through 2020, as well as the agricultural policy. Farm policy and subsidies accounted for 44 percent of total EU spending last year, according to figures from the European Commission, the bloc’s executive arm.

“This project is in no way an acceptable basis for negotiation for France on the proposed spending ceilings for the common agricultural policy,” the French government wrote in a statement this week.

Van Rompuy’s proposal foresees total EU spending of 973 billion euros from 2014 to 2020, compared with the commission’s proposed 1.03 trillion euros.

EU Agriculture Commissioner Dacian Ciolos is “seriously worried” about the proposed cut, according to spokesman Roger Waite. The bloc’s budget for agriculture and rural development was 58 billion euros in 2011, according to the commission.

The EU grows about 21 percent of the world’s wheat and accounts for 13 percent of corn output and 39 percent of barley production, according to the International Grains Council. The bloc produces 31 percent of the world’s milk and is home to 19 percent of its pigs, U.S. Department of Agriculture data show.

The farmers receiving the least support will be hit hardest, and the Van Rompuy proposal takes the CAP budget back 30 years, according to Ciolos.

“This is clearly a step away from a common agricultural policy,” Waite said. “Van Rompuy is looking to provide flexibility to member states to shift money between rural development policy and direct payments.”

French Agriculture Minister Stephane Le Foll, German counterpart Ilse Aigner and Spain’s Miguel Arias Canete last month called for stable funding of the CAP, saying they backed a commission proposal to maintain the farm budget at the 2013 level for the period through 2020.

France got 9.93 billion euros from the European farm and rural development budget last year, or 17 percent of total spending. The country accounted for 18 percent of the EU’s agricultural output of 377.9 billion euros in 2011, according to the bloc’s statistics department.

Britain got 4.07 billion euros of farm aid in 2010, or 7 percent of the total agriculture budget, while its agriculture output was 6.7 percent of the EU’s farm production.

“This policy should be maintained to meet the needs of an indispensable economic sector, which, through the food- processing industries, plays a crucial in the growth, employment and external trade balance in France and Europe,” the French government said.

France had a current-account surplus of 11.6 billion euros in farm products and food trade last year, the highest since at least 1995, according to data from the Agriculture Ministry.

“Agriculture has been a motor for recovery in Ireland,” Waite said. “We’re seeing more people coming into agriculture also in Spain. This is a potential way of creating growth and employment, especially for rural development.”