Stop throwing money at farm millionaires

26 August 2012

Stop throwing money at farm millionaires

In times of crisis in particular it is good to know where our tax euros are being spent. Whatever else, they shouldn’t be going to farm millionaires.

Henk van Gerven is a Member of Parliament for the SP

Henk van GervenIn 2011, just 1,500 Europeans each received in excess of a million euros in agricultural subsidies. Examples include Sir Richard Sutton, one of England’s richest men, and the Danish royal house, as well as companies such as Unilever Spain, Nestlé and Madeira’s agricultural corporation. In total, these millionaires got €3.8 billion in 2011.

Where are these millionaires to be found? According to farmsubsidy.org Italy counts 211 landowners who have become millionaires thanks to the European Union, Spain 230 and France 137. In the Netherlands the total stands at twenty-three, most of them cooperatives.

In previous years multinationals such as Cargill/Cerestar have been paid millions in farm subsidies via the Netherlands. Whether that continues to be the case isn’t clear. Around 92% of data on subsidies have been kept secret. According to farmsubsidy.org, the Netherlands has established a website which deliberately hinders the accessibility of the grant data and which stands right at the bottom of the transparency index.

The European Commission has proposed that a ceiling be put on European farm subsidies, so that a million or more could no longer go to a single recipient. Instead, direct payments would be limited to €300,000. From €150.000 upwards, reductions would be imposed. A motion supporting this proposal was brought forward in the Dutch national parliament by the SP. It was, however, rejected by the two governing centre-right parties, the VVD and the CDA, together with the hard right PVV. Evidently these parties want to see millionaires continuing to be showered with money when the revised Common Agricultural Policy (CAP) is established for the years 2014-2020. Quite astonishing for parties which claim to be careful with national finances.

The SP has been has been arguing for a subsidy ceiling for years. Agriculture is an important and even essential sector, which certainly deserves support. But why should the subsidies go straight to millionaires? Subsidies should go to small and middle-sized agricultural concerns, to family farms. It’s not good to see 80% of subsidies going to 20% of recipients. Nor should so much of this go in income subsidies. Agriculture is not like other industries. It has also an important social function. Subsidies should be aimed at encouraging sustainable agriculture and social functions such as environmental management, recreation, animal welfare, sound market regulation and the prevention of damage to health. In addition we should be working towards a stable and honest price for the farmer.

The CAP rests on three pillars: direct payments, market- and price intervention, and rural development. The first needs to be reduced as I argued above, and the second should have a safety net function aimed at addressing the large fluctuations in prices. The third is essential, but should be used in Europe to exchange best practices, not to make it compulsory to do the same thing everywhere. With such a policy, spending on the CAP could be halved.

After the summer the revision of the CAP will be debated further. This discussion concerns a budget for 2014-2020 of €435 billion. Another chance won’t come until the next revision, scheduled for 2020. It would be prudent for the new government to change agricultural policy. Investing in a goal-oriented way is better than giving taxpayers’ money to people who don’t need it.

This article first appeared on 22-08-2012, in Dutch, in the regional newspaper BN de Stem

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