farm subsidies germany agricultural policy ciolos

Farm Wars -- EU Grapples with Costs Sans Benefits
direct payment

European Public Support for Farm Subsidies Eroding

The European Union plans to spend about €60 billion, or about 40 percent of the entire EU budget, on subsidizing a sector that generates less than 2% of the bloc's GDP. The main beneficiaries are big agri-businesses that receive annual payments of up to €120,000 per employee. We excerpt this 2013 article from Der Spiegle, Feb 5.

By Susanne Amann, Jörg Schindler and Christoph Schult

Voters' opinions of farm subsidies were borne out in the recent elections in the agricultural state of Lower Saxony in northern Germany: Residents tired of the stench of liquid manure and large factory farms summarily voted the pro-farmer Christian Democratic Union (CDU) out of office.

The trend is also reflected in the academic and political worlds. In a declaration published in November 2009, agricultural economists from all over Europe called for agricultural policy to be more strongly oriented toward goals like climate protection and water management. In December 2011, Germany's upper legislative chamber, the Bundesrat, which represents the 16 German states, demanded that the direct payments be "more strongly legitimized by social contributions." The German conference of agriculture ministers also endorsed the fundamentals of the Ciolos proposals.

"Ironically Germany, which is the largest net payer and usually wants the European Commission to pay special attention to how public money is being spent, is now saying no to the capping of direct payments to large farms," EU Commissioner Dacian Ciolos says.

Ciolos wanted to eliminate direct payments to the largest operations, which can run their farms on their own steam. Agriculture Minister Ilse Aigner (of the CSU, like Merkel) claimed that if that happened, the companies would simply divide themselves into smaller entities to qualify for the subsidies again.

If the farming lobby does manage to block the Ciolos reform, a much more unpleasant debate could follow, namely whether the billions in subsidies in the current form are justifiable at all.

Global market prices have almost doubled since 2005. Larger farms recently made an average annual profit of about €160,000, of which about 40 percent was financed with taxpayer money. Farmers are also increasingly profiting from the boom in alternative energy, as they rake in millions with biogas plants and wind turbines that they operate on the side.

To read more

JJS: Politicians doling out public revenue to powerful constituents is the name of the game. Agri-subsidies is but one of the many costly favors for insiders. If you’d like to put a stop to it, you’d have to take the power of discretionary spending out of the hands of government officials.

Bumping big farms out of the budget might not be so bad but it’d also mean de-funding schools and clinics and whatever else you might like. But would that be so bad? Not if you got a share of the public revenue and could decide which teachers and doctors to hire yourself.

From where would your direct payment come, what source of funds? It’d come from the worth of Earth, from all of society’s spending for land and resources. So, instead of subsidizing farmers, you’d charge them, and all owners, rent, plus you’d pay them and the citizenry a dividend. Since farm land is less valuable than commercial land, farmers who actually live where they farm and farm where they live would come out ahead. Plus the food would be healthier and tastier.

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Editor Jeffery J. Smith runs the Forum on Geonomics and helped prepare a course for the UN on geonomics. To take the “Land Rights” course, click here .

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