10 May: Sugar is sweeter

Who wants to be a farm subsidy millionaire? Quite a few, it turns out.

According to data released by EU governments – and crunched by our sister organisation FarmSubsidy.org – the number of farmers and food companies who received individual payments of more than €1m this year rose by more than 20 percent on the previous year.

Count ‘em up: Germany has 268 millionaire recipients, while France has 174 subsidy millionaires, including several banana-producing companies in French overseas territories. Altogether France’s subsidy millionaires took over €1bn in 2009. Besides the sugar refiners, big payouts went to dairy processors and trading companies, as the EU increased dairy export subsidies in 2009.

As capreform.eu and farmsubsidy.org’s Jack Thurston told The Guardian: “Messing around with agricultural markets helps the big guys who don’t need it. If smaller farmers who struggle to stay competitive need to be supported because they provide social and environmental benefits, they should be paid from social and environmental funds, because ultimately market interventions don’t work.”

Of course, when it comes to farm subsidies, sugar really is sweeter. According to the new data, the EU’s sugar companies were once again among the largest recipients of CAP payments.

In France, three sugar companies received the largest CAP payments (Tereos €178m, St Louis Sucre €144m, and Cristal Union €57m). Across the border, in Spain, the top recipient of subsidies was sugar company Azucarera Ebro, who nabbed €119m. And the second largest recipient in Germany was the world’s largest sugar processor and trader, Sudzucker, who claimed a cushy €42.9m.

And Britain? Alas, with an election taking place last Thursday, British civil servants decided to stop the public from seeing the data, because it might disrupt election campaigning. It would be unfair, Whitehall thought, to ask candidates questions about subsidy payments and better therefore to leave the public in blissful ignorance about the facts.

Unfair to whom exactly? Initial data harvesting by farmsubsidy.org reveals that possibly up to 70 of the 650 Conservative candidates standing at the election could be receiving some sort of subsidy. In a delicious twist, up to half a dozen euro-skeptic UKIP candidates could be receiving EU cash.

While the data does not indicate why these payments to sugar companies were made, it may be assumed they are part of the EU’s complex programme for reducing the capacity of the EU sugar sector, in line with its WTO obligations.

Other top recipients include dairy processing and trading companies that have benefited from the reintroduction of the EU’s export subsidies for milk powder and butter, which enable them to dump excess European milk production on world markets.

Once again, this year’s data has thrown up some peculiarities. The youngest recipient of CAP funds in Sweden is 14 years old, while two Swedish recipients are listed as 100 years old, but are both dead. An ice-skating club in the Netherlands took €162,444, an accordian club in Sweden €59,585. The revelations hit the headlines across the continent.

How did the EU’s farm commissioner Dacian Ciolo? react to all this? “I welcome the transparency initiative, and hope that our work with Member State Ministries of Agriculture in the last 12 months will ensure that the quality of data available is even better than it was last year – the first time that these figures were published.”

Last week also saw Ciolo? speak at a conference on the future of the CAP in Copenhagen. The EU’s farm commissioner stressed the need for “long-term, objective criteria” for direct payments, saying “public funds must be divided up fairly and transparently”. He also argued that a fairer distribution of support does not necessarily mean the “same thing” for all farmers and reiterated the need “to take account of the collapse of farmers’ earnings in 2009”.

Meanwhile, French farm minister Bruno Le Maire refused to accept a lower budget for EU farmers but agreed to link farm aid to the protection of public goods and services such as the environment, energy and water in the future. His Polish counterpart Marek Sawicki echoed this, arguing that the future budget should be “at least on the same level as we have today.” Le Maire also called for stronger market regulation, insurance schemes and increased intervention stocks.

On the other hand, Germany’s farm minister Ilse Aigner called for a clearer distinction between pillar 1 and 2 funds and for a complete decoupling of payments.

Aigner’s Dutch counterpart Gerda Verburg insisted on the need for “more targeted direct payments” from pillar 1 in order to “improve the competitiveness and sustainability of European agriculture through knowledge, innovation and investment”. Danish farm minister Henrik Høegh also called for an overhaul of Pillar 1.

Also last week, the  EU farm union umbrella group, COPA-COGECA, outlined its position on the future of the CAP. It agreed that direct payments must be maintained to help farmers deal with poor market conditions and market volatility.

Padraig Walsh, COPA president, said adjustments to the CAP post-2013 should focus on increasing market stability and making farming more profitable. He added: “We definitely do no want to see any further renationalisation of the CAP or any increase in co-financing which would lead to distortions of competition and undermine the single market.”

The same day, Britain’s National Farmers Union launched a policy document on the future of the CAP. The NFU believes the CAP should focus on maintaining the UK’s productive capacity in Europe; providing a buffer against the threat posed to farmers by volatile markets; supporting efforts by farmers to become more competitive; and providing incentives to improve environmental performance.

Wyn Grant provides an initial reaction on his blog: “The NFU has been working on this policy statement for some time and as one would expect it is a strategically oriented and sophisticated analysis. Clearly it takes account of the perspectives of farmers, but it is also politically realistic in terms of what can be achieved.”

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