Cuts on farm subsidies could be major for European agriculture

Christopher Werth Apr 12, 2011

Cuts on farm subsidies could be major for European agriculture

Christopher Werth Apr 12, 2011

Kai Ryssdal: Even though there’s still snow on the ground in some parts of the country, in other parts, it’s planting season already. The Department of Agriculture released its first crop progress report of the year yesterday. Corn, wheat, cotton — they’re all in the ground already.

Over in Europe, though, the turn of the plow is running smack into a debate about agricultural subsidies. European farmers are, in general, more dependent on government help than farmers here. French farmers, in particular, are some of the biggest beneficiaries of subsidies. And also some of the strong opponents of a plan being floated to get rid of them.

Christopher Werth has the story.

Christopher Werth: This is a story of two farms. One, a rather big farm — which we’ll get to in a moment — and the other, just a few bucolic acres in the mountains of Southern France. Here, Andreas Muller switches on a milking machine and corrals his sheep into a barn.

Muller and his wife turn the milk into organic cheese, which they sell at local farmers’ markets. It sounds nice, but Muller admits it’s not the easiest way to make a living.

Andreas Muller: A farmer makes a product, and would like to make a living from that product. But more and more, we have to rely on subsidies.

The EU spends nearly $80 billion a year on farm subsidies. And when it comes to who gets the bulk of that money, it may not be the image most Europeans have in mind. Catherine Moreddu is an agronomist at the Organization for Economic Cooperation and Development. She says it’s not the small, struggling farmer.

Catherine Moreddu: They don’t realize that a lot of the money is going to people who are really wealthy, wealthier than them.

The EU’s system of subsidies was created to revive European agriculture after the Second World War. In the past, it encouraged farmers to over-produce. You might remember stories of “butter mountains” and “lakes of milk.” Moreddu says those days are over. Today, the funds are largely divvied up according to the number of acres a farmer has.

Moreddu: And what you see is that most of the payments are received by larger farms.

Farms like Christoph Buren’s, the first of the two farms I mentioned earlier. When I visited his 1,000-acre spread in the Champaign region, his fields were being sprayed with fertilizer. Buren and I climbed aboard a tractor to have a look around.

Christoph Buren: On the right we are seeing wheat — winter wheat.

Buren’s farm is about two-and-a-half times bigger than other farms in the area. He gets $200,000 a year in subsidies. That dwarfs the $29,000 Andreas Muller, our sheep farmer gets. But Buren says payments to big farms like his are essential for keeping pace with rising global demand for food.

Buren: We have to keep our subsidies. We have to help farmers to produce more tomorrow.

But critics argue the opposite. They say rising food prices mean farmers can survive without government support. Buren says they forget farming is no sure thing.

Buren: If you can tell me now, here in this tractor, that the prices stay very high each year, I sign and I say no more subsidies and only prices, but I don’t think you can give me a guarantee that prices will stay very high.

Right now, farm subsidies account for about 40 percent of the EU’s budget. Member countries like the U.K. and the Netherlands would like to see that reduced. But newer EU members like Poland want to see their share of farm subsidies increased. The European commission is expected to take up the issue later this year.

I’m Christopher Werth for Marketplace.

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