Farmers attack plan to revamp rural policy aid

Date: 19/02/1998

By Myles Neligan

EU RURAL development funds would be concentrated on the Union's poorest areas and farming subsidies diverted to make up the shortfall in other regions, under new European Commission proposals to be unveiled next month.

But while the proposed reform is in line with Commission plans to simplify procedures and target expenditure more effectively, Union farmers have already protested that the new package is "incoherent" and will compromise their all-important market support payments.

The proposal, due to be adopted by the full Commission on 18 March, constitutes the most far-reaching overhaul of the Union's unwieldy rural development policy in 30 years.

If national governments endorse the plan, 60 existing EU rural development instruments will be incorporated into a single framework regulation.

At the same time, expenditure from the 'guidance' section of the European Agricultural Guidance and Guarantee Fund (EAGGF), which currently finances most EU rural development programmes, will be targeted exclusively at the Union's poorest 'Objective 1' areas.

Rural development projects outside these areas will be financed from the EAGGF guarantee section - traditionally reserved for more expensive and politically sensitive market support measures - imposing an extra financial burden of approximately 2 billion ecu or 5% of total annual expenditure on its budget.

The Commission argues that this strategy would maximise the impact of rural development spending, contrasting it favourably with the current fragmented approach.

Officials also point out that a greater number of programmes would benefit from the guarantee section's more regular payment schedule. "This is a well thought-out proposal, which should attract widespread support amongst the member states," claimed one.

However, EU farmers' association COPA is highly critical of the plan, rejecting the proposed reallocation of funds and protesting that most rural development measures are not an appropriate use of market support money.

"It is incoherent to use a fund designed to disburse monthly market support payments to pay for long-term rural development projects. We also feel, as a matter of principle, that guarantee fund expenditure should be reserved for measures that are of direct relevance to agricultural production. This would not include, for example, the restructuring of rural villages," said a COPA representative.

COPA has long insisted that the structural adjustment of the EU's rural areas can only be successfully completed if extra funds, over and above the existing agricultural guideline, are made available.

Officials within the Commission acknowledge that the proposal's failure to send out a signal of support to young farmers is also likely to attract strong criticism. Despite repeated calls for an increase in the level of assistance to first-time farmers faced with huge start-up costs, the draft framework regulation merely rolls over the existing aid arrangements.