Luxembourg seeks to limit rural development funding

By David Cronin

Date: 02/06/05

Later this month EU farm ministers will seek to reach agreement on how the development of rural areas should be financed.

Securing an ambitious programme on rural development is seen in many circles as a litmus test for the entire reform of the Common Agriculture Policy (CAP), especially as 80% of this continent's territory remains in the countryside.

During the 1990s, EU policymakers decided that, as well as the traditional focus of the CAP on sustaining the profitability of agriculture, it should aim to protect employment, the economy and the environment.

Franz Fischler, then the European commissioner for agriculture, proposed details of a European Agriculture Rural Development Fund in July 2004.

Luxembourg's EU presidency is hoping to clinch a deal on the main points of this fund when the Union's farm ministers meet on 20-21 June. This week the presidency embarked on a round of meetings with farm ministers from the other member states to prepare the ground.

Under the Commission's proposals, nearly €89 billion would be spent in 2007-13 on such measures as enhancing food quality, reducing pesticide use, encouraging tourism and paying greater attention to animal welfare. Luxembourg, however, has suggested a considerably smaller amount. In a 19 May paper on the EU's spending plans, it suggests that €69-77bn should be allocated to rural development over the same timeframe.

Reflecting the heterogeneous nature of European agriculture, member states have raised numerous concerns about the Commission's plans.

The most serious relate to the carve-up of funds between different regions. Italy, Poland, Spain, the Czech Republic and France are unhappy with efforts by the Commission to decide which regions qualify for greater aid than others, based on their relative level of wealth.

One possibility being floated is that the carve-up could be kept separate from the package and returned to at a later date. "We could still agree the principles, without the money," says a Commission insider.

Rural development expenditure varies widely between EU member states, particularly when it comes to environmental protection.

A study published by the Commission in March stated that Austria, Sweden and Italy spend 50% of money allocated to them under the European Agricultural Guidance and Guarantee Fund (EAGGF) on agri-environment measures. Belgium, Spain, the Netherlands and Greece struggle to reach 30%, it added.

Environmentalists are perturbed by indications that rural development could take a bruising in the current negotiations on the EU's spending plans for 2007-13. "Those states that want to lower their overall contributions to the EU budget have said they do not have any problem with cuts coming from rural development," notes Elisabeth Guttenstein from the World Wide Fund for Nature.

A new report by the Eurogroup for Animal Welfare complains that funding of agri-environment measures are the only things deemed compulsory by the rural development proposal. It argues that EU governments should commit far greater resources to stamping out cruelty to animals and that the Union's funds could be used more for objectives like ending the practice of keeping hens in battery cages.

Article takes a look at the current negotiations on the future financing of the rural development section ('second pillar') of the EU's Common Agricultural Policy.

European Commission: DG Agriculture and Rural Development: Rural Development http://ec.europa.eu/comm/agriculture/rur/index_en.htm

---