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Portugal’s farmers pocket €463.2 million

tractorplougingSupport for Portugal’s agricultural sector continues with an eye-watering €1.7 billion delivered to farmers during the course of 2016.

The final payment for the year was released today by the Ministry of Agriculture with €463.2 million in ‘aid,’ under various headings,  winging its way to farmers and agricultural businesses across the country.

The headings under which support has been given this year include €947.1 million under the European Agricultural Guarantee Fund, €259.1 million under the Basic Payment Scheme, €310.9 million under the Payment for Beneficial Agricultural Practices (Greening), €113.2 million for Associated Voluntary Support (animals) and €58.1 million under the New Vineyard Regime.

Then there’s the POSEI programme (€16.2 million) and €74.2 million for the Local Productions - Azores and €23.1 million for their colleagues in Madeira. The list goes on: €629.8 million under EAFRD, €200.1 million for soemthing called, simply,  'Investment,' €210.1 million for Agri-Environment Measures and €142.1 million for Maintenance of Agricultural Activity in Disadvantaged Areas.

Regarding today’s payment through the Agriculture and Fisheries Financing Institute, there is €65.8 million in the Base Payment Scheme; €152 million for Greening and €29.7 million under the Small Agriculture Scheme. The dairy sector, screwed by the supermarkets over the price paid for milk, has received €27.7 million and measures to support the afforestation of agricultural land will receive €13.7 million.

This is what the European Union is all about, vast grants delivered to agriculture. It is little different in the rich northern European countries where the already well-off get richer as they are paid by the hectare in a grant-ledbusienss sector.

The supermarkets are well aware of the grant structure that keeps their input supply costs artificially low, this can be seen in the milk market where recent rows over the pitiful price paid per litre have hit the headlines. The big chains put remorseless pressure on suppliers who, in turn, are able to access grants that make other business sectors green with envy.

Portugal’s recent boom in agriculture also has been grant-led with capital costs being subsidised by the taxpayer and the much talked about 'jobs boom' being created by no more than cheap, and often illegal, foreign labour toiling at less than the minimum wage, especially in the Algarve’s red fruit sector.

There has been little economic sense in European farming policy since the early days of the common Agricultural Policy with support pricing leading to inefficiency and the unnecessary production of surpluses.

The consumer now is used to low prices: the retail price index has become a measure of government performance. Under the current EU strategic objectives for farming, little has changed since the ‘70s, this is the way it is and Portugal is in no position to turn down the grant income, nor are any of its European partners.

A post-Brexit Britain faces supporting each registered farmer when the flow of money is switched off by Brussels. Currently, Brussels supplies 55% of UK farming incomes so a post-EU budget for Britain has around £3 billion to find just to replace the current level of CAP payments.

While Portugal remains in the EU club, farmers will continue to be supported, however skewed the underlying economics may be.

Here is a summary of the pros and cons of the Common Agricultural Policy:

AGAINST the Common Agricultural Policy

1. WASTE

By ignoring the rules of supply and demand, the Common Agricultural Policy is hugely wasteful. It leads to overproduction, forming mountains of surplus produce which are either destroyed or dumped on developing nations, undermining the livelihoods of farmers there. A free market would ensure a more effective allocation of resources. Managing the CAP eats up vast amounts of money: from 6.7 % of CAP payments disbursed in France, to 9.3% in Germany.

2. SO MUCH FROM SO MANY TO SO FEW

Farmers represent 3% of the EU’s population. They generate (together with the agri-food business) roughly 6% of the Union’s GDP. Yet they receive 30% of the EU’s total budget through CAP handouts. Europe’s taxpayers hand over €58 billion in subsidies to this tiny, unproductive minority. In times of economic hardship that just doesn’t make sense.

3. HELPING THE RICH GET RICHER

The idea that the CAP protects small farmers and the rural way of life is a myth. Eighty percent of CAP aid goes to just 20 percent of farms. The biggest slice of the subsidy pie is handed to the landed gentry, environment- destroying mega-farms and vast agro-industrial conglomerates. Figures from the UK show Queen Elizabeth II gets around half-a-million euros a year. Food industry giants like Campina or Nestle have been handed hundreds of millions. Small-scale European farmers get little and poor farmers in developing nations are shut out of European markets.

4. WE ALL PAY MORE

CAP is a double-whammy for your wallet. Taxpayers fork out billions in subsidies then pay again when CAP artificially inflates food prices. CAP supporters say this is a price worth paying for food security, but that’s nonsense. With free trade we could import bountiful cheap food from the United States, Canada, China and elsewhere in the globalised world. Food security just isn’t a problem. CAP artificially shields farmers from healthy competition, hindering the evolution of more modern, more efficient agriculture.

              

FOR the Common Agricultural Policy

1. PUTTING FOOD ON EUROPE’S PLATE

CAP gives Europe food security. Without it, we would be dangerously dependent on fluctuating imports. Farmers need the stability CAP provides. Left to the mercy of the market, they couldn’t invest in improvements to productivity, food safety or environment protection. CAP ensures Europeans have stable food supplies at reasonable prices. As global warming increasingly impacts on harvests it’s even more important to protect domestic food supplies. Without CAP, all 28 EU nations would develop their own competing farm support systems, creating single market chaos.

              

2. PROTECTING THE RURAL COMMUNITIES

Europe’s rural communities are under threat. With farmers’ incomes only about half the average EU wage, it’s no surprise that over the last decade agricultural employment fell by 25 percent. Every year, Europe has 2 percent fewer farmers. Around 60 percent of the EU population lives in the countryside which covers 90 percent of the Union’s territory. The countryside is one of our greatest assets, and farmers need help to protect the rural environment and way of life. Today’s reformed CAP offers training for farmers, and assistance to young farmers starting up. Subsidies are increasingly orientated toward rural development.

              

3. TASTY EUROPEAN FOOD VARIETY

Europe has the world’s best food and CAP promotes quality and diversity. Under CAP, 750 traditional local foods are protected along with 2,000 wines and spirits – from Newmarket sausages and Azores pineapples to Rioja and Beaujolais. Abolishing the CAP would put such delights under threat and put Europe on a diet of bland processed foods churned out by US-style factory farms. Recent reforms ensure the EU is a world leader in promoting food safety and the development of organic produce.

              

4. PROTECTING THE ENVIRONMENT, SUPPORTING DEVELOPMENT

Increasingly, the CAP is used to protect the rural environment. Farmers get more if they sign up to agro-environment commitments – using fewer chemicals; leaving boundaries uncultivated; maintaining ponds, trees and hedges; protecting wildlife. EU food surpluses help developing countries by providing a source of cheap food. It’s ridiculous to suggest the CAP is protectionist or harms developing countries because the EU remains the world’s biggest importer of food, buying in €65 billion a year. Europe imports more food from developing countries than the United States, Japan, Canada, Australia and New Zealand put together. CAP also ensures that the EU is also the world’s second largest food exporter.

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Comments  

0 #6 Margaridaana 2017-01-02 14:42
Quoting DAVID PIMBLETT:
You do not see many poor farmers- we overpay for food in the EU and fortunately for the UK they are leaving . Unfortunately for the rest of the EU they will be saddled with rising costs ,higher prices and mounting debt.
Happy new year

I read in an article recently that the Portuguese pay less for food than any other EU country and certainly on visits to UK I would say that prices for food in UK are significantly higher than here.
That said, yes, the debt mountain keeps growing.
+1 #5 DAVID PIMBLETT 2017-01-02 09:17
You do not see many poor farmers- we overpay for food in the EU and fortunately for the UK they are leaving . Unfortunately for the rest of the EU they will be saddled with rising costs ,higher prices and mounting debt.
Happy new year
+2 #4 Cull them 2017-01-01 11:25
So many are 'land owners' (inheritors of land theft) until there is a handout to be had, then they become 'farmers'. - Remember 'set aside'?
+2 #3 dw 2016-12-31 10:08
The CAP is another example of corporate welfare; a transfer of money from the general population to the already wealthy elites.
0 #2 Ed 2016-12-31 09:32
Quoting Stefan Drew:
Many years ago NZ stopped agricultural grants. It was tough for a few years but they now thrive.

Are grants really needed?

I have added a list of arguments For and Against the CAP, Stefan, and will research what went on in New Zealand where the economy appears not to have collapsed !
+2 #1 Stefan Drew 2016-12-31 08:11
Many years ago NZ stopped agricultural grants. It was tough for a few years but they now thrive.

Are grants really needed?

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