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The (re-)distribution of CAP subsidies

Just days before the final ag Council meeting under the Czech EU presidency, member states’ positions on the Council Conclusions are still far apart. Things look a lot like last year when France attempted to show the way to long-term CAP reform, while some states resisted any move that could pre-empt the budget review/financial framework negotiations. CAP defenders are again trying to integrate far-reaching & far-fetched arguments on the benefits of the CAP that would point towards maintaining a big CAP budget and a strong first pillar.

A difference this time is that the Czechs are pushing the issue of redistributing subsidies across member states. Various criteria for future subsidy allocation have been floated. Some look rather dangerous: if CAP money is distributed according to agricultural employment or the number of farms, it will again be ‘farmers’ money’ and not public money to be spent on farming (and land use more generally) so as to enhance society’s well-being.

ECIPE has just published a study that examines which criteria could reasonably guide future allocation. The study also develops scenarios for the future distribution of CAP subsidies (conservative, area-based, multifunctional). The results reveal surprising differences between the negotiating positions that countries traditionally adopt and the payments they can expect from reform. Some countries that defend the status quo would gain substantially from reform. This is especially striking in the case of Spain and Finland. By contrast, most Eastern European states can expect to gain only moderately – or they even risk losing. They would therefore be served best by minimizing CAP expenditures in order to free up money for the EU’s structural funds.

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