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US farm subsidies face cuts; Europe's sacred cows safe despite rising food prices
By Michael Hennigan, Founder and Editor of Finfacts
Apr 12, 2011 - 4:45 AM
With the US farm economy booming,
Washington is set to tackle some sacred cows including farm subsidies. However,
in Europe there is no appetite to tackle the farming lobby despite rising food
prices. The biggest battle there is dividing up the Common Agricultural Policy
budget - - one of the the world's premier socialist programs -- that
accounts for over 40% of Brussels' annual budget.
In a signal of business as usual in
Europe, last month agriculture ministers refused to cap payments to big farmers
and companies, which take the lion's share of the welfare budget. However,
there was a concession on a fairer share-out of funds between farmers in eastern
and western Europe.
French Agriculture Minister
Bruno Le Maire said negotiations on a new share-out would likely be "very tough."
big landowners are the biggest beneficiaries and in 2009,
434 Irish-based individuals and companies received more than €100,000 each
under the welfare scheme. Across the whole EU, it is the big farmers
and companies at 20% of the population who receive 74% of funding.
received over €3m in 2009 and total Irish receipts were €1.9bn.
commissioner Dacian Ciolos said in an interview last month that
"it is difficult to explain to outsiders that a few farmers are paid hundreds of
thousands, or even millions of euros."
Farm payments account for roughly
€55bn of the EU's €120bn annual budget and every year around €42bn is given in
free handouts to farmers in Europe. Beef baron Larry Goodman received more than
a half million euros in 2004 and the direct payment is made even if only for
watching the grass grow on his 1,600 acre estate.
In the UK, the Queen gets a welfare
cheque to support her Sandringham estate.
Farms in EU: Less than 1 % of European farms occupy 20 % of usable land
The OECD says subsidies provide
23% of farm income in the EU compared with 9% in the US and 61% in Japan.
France is the
recipient of CAP funds at about 20%, with Spain, Germany, Italy and the UK all
receiving significant amounts (two-thirds
of the total between these five countries in
Greece and Ireland receive the largest per
countries that joined from 2004
initially receive 25% of the rate of the older
members. However, payments will converge by
The Wall Street Journal reports that
Republican House Budget Committee chairman Paul Ryan's blueprint for the fiscal
2012 budget puts agriculture subsidies in the cross hairs, seeking to cut $30bn
over a decade - - starting when the next farm bill is passed in 2012 - - out of
a total of some $150 billion in total expected spending on farm subsidies.
The Journal says $5bn in direct
payments to farmers accounts for a third of the roughly $15bn in total farm
subsidies last year, according to government data.
The US Department of Agriculture estimates net farm income this year will be the
second-highest in 35 years and who has heard that Irish farm income surged 39%
in 2010? There were no tractorcades to hail this good news!
Irish State Secret!: Ireland's farm incomes rose a stunning 39.1% in 2010
Global food prices rose for eighth straight month in February; Real food cost at
lowest since Great Depression
Government support to farmers rises slightly in OECD countries to $252.5bn or
22% of total farm receipts in 2009
Number of EU Common Agricultural Policy millionaires
rises 20% in 2009
Some Irish land will have to be dezoned says planning board head; Ireland has 88
planning authorities for population of 4.4m
Irish Farmers and Sacred Cows
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