Reforming Europe's Farms

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Farmers harvesting a fallowed field near Audrieu western France.

Cheap foreign food can change appetites, and attitudes. As Europeans develop a taste for other peoples' cuisine, they are asking why billions of euros should be funneled to their own farmers, particularly when the biggest recipients of Europe's largesse are not honest yeomen toiling to make ends meet, but rich landowners like Queen Elizabeth and Prince Charles.

The European Commission on Tuesday addressed the issue head-on when it proposed reforms to the European Union's Common Agricultural Policy (CAP), the skein of price supports, export subsidies, and environmental payments that gobbles up 44% of the E.U.'s $187 billion annual budget.

Dubbed a "health check" for the CAP, the policy review suggests revamping the Union's single biggest policy domain to better address modern challenges like climate change, the boom in biofuels, water management and protecting biodiversity. The Commission floats once heretical ideas such as phasing out milk quotas, scrapping rules on keeping land fallow and guaranteeing minimum cereal prices.

The proposed reforms aim, too, to tackle what many consider the CAP's most egregious element: the generous flow of aid to the largest farms and the wealthiest landowners. While most of the CAP budget is dispersed as direct aid to farmers, most of that goes to the largest farmers. Another large chunk goes toward other CAP schemes such as export refunds to large companies, storage outlays and payments to slaughterhouses to offset costs of measures to eradicate BSE, or Mad Cow Disease.

Along with British royalty, beneficiaries include multinational food companies such as Nestle, Cadbury, Kraft; drug companies such as GlaxoSmithKline, and brewers like Heineken and Grolsch. Money even flows to tobacco giant Philip Morris, the oil behemoth Shell and even the airline Air France-KLM. British sugar giant Tate & Lyle alone received more than $443 million over a two-year period. TIME has recently chronicled similar patterns in U.S. farm subsidies.

E.U. Agriculture Commissioner Mariann Fischer Boel — who herself owns three farms in Denmark — says the proposed changes would redirect farm aid to those who really need it. They slash subsidies above $147,000 by 10%, above $296,000 by 20% and above $443,000 by 45%. "We need to look at whether we need to adjust the CAP for an E.U. of 27 countries and a rapidly changing world," Fischer Boel said. "The changes I propose will make a real difference for farmers, consumers and taxpayers."

The proposals target not only the biggest, but also the smallest: the amount of land a farmer has to own to be eligible for aid would rise. At the moment that stands at 0.3 hectares, less than the size of a football field, and the Commission says the administrative cost of dealing with such postage-stamp holdings is often more than the subsidy itself.

Commission officials say farm aid is not just about handouts for food production, but about preserving Europe's rural heritage. In recent years, aid has prioritized environmental and tourist activities linked to protecting rural areas against extreme weather and climate change. Fischer Boel's proposals aim to go even further in that direction.

Other proposals include scrapping the practice of "set-asides" — whereby farmers have to leave 10% of their land idle at any given time — and ending the practice of buying surplus production of key commodities like cereals at a guaranteed price.

However, this is just the start of the process. E.U. governments and the European Parliament will decide on any reforms in the second half of 2008. As it happens, that is when France — the biggest recipient of E.U. farm subsidies — will hold the E.U.'s rotating presidency. German and British officials have already signaled their resistance to the plans, arguing that larger farms are more efficient and ought not be penalized.

If past experience is any guide, this reform will likely be watered down once national governments and farming lobbies go to work on it. But for Fischer Boel, at least, the worst excesses of the E.U.'s farm policies have become so indigestible that it is time to take them off the menu.