Subsidies to agriculture have EU nations at odds

So much for British civility and manners and the French reputation for reserve and aloofness.

The recently-concluded European Union Summit, typically an exercise in bureaucratic boredom, was filled with acrimony between the leaders of the two countries.

In the end, it accomplished little or nothing.

The sound and fury between Britain's Prime Minister Tony Blair and France's President Jacques Chirac centered on agricultural subsidies and the “rebate” paid to Britain to offset the disparity between the far greater number of farmers receiving payments in France than in England.

Under the EU's Common Agricultural Policy (CAP), France gets about $13 billion in farm subsidies each year, more than any other EU nation, while Britain gets about $5.6 billion in rebate payments.

Chirac wanted to reduce Britain's rebate, but Blair would have none of it unless France agreed to a corresponding reduction in subsidies to French farmers.

Neither would budge — Blair termed Chirac's behavior “bizarre”; Chirac said Blair behaved in a “strange and pathetic way” — and the summit pretty much ground to a halt.

“Europe is in a deep crisis,” was the assessment of EU President Jean-Claude Juncker, also Luxembourg's prime minister.

Coming just two weeks after French and Dutch voters resoundingly and rancorously defeated a proposed EU constitution, causing EU leaders to abort further attempts at ratification by other member countries, it only added to the air of uncertainty spreading through the 25-nation bloc.

The CAP, which dates back nearly half a century, was forged to insure food self-sufficiency in a Europe and Britain still remembering the deprivations of World War II. Too much of a good thing, though, it resulted in “mountains of beef and butter, lakes of milk and wine.”

Subsequent reforms helped clear surpluses and reduce costs. But while farmer numbers have dropped, agriculture subsidy payments still represent 40 percent or more of the entire EU budget, with almost a third going to France. Spending for agriculture, critics say, is seven times more than for education, research, science, and infrastructure.

In 2003, subsidies were linked more to environmental, food safety, and animal welfare requirements (reflecting the trend for U.S. farm programs in recent years).

But there is strong sentiment in several EU nations, including Britain, for radical changes in the CAP, which the Financial Times has labeled “a hugely wasteful policy that keeps food prices artificially high and distorts the world market for agriculture.”

Prime Minister Blair, who becomes EU president July 1, had previously agreed to support continuing the CAP through the budget period ending in 2013, but now says it “is not the right concept for Great Britain and it is not the right concept for Europe.”

As if all this weren't theater of the highest order, Jose Barroso, European Union Commission president, has threatened to quit if Britain insists on protecting its rebate, and hinted that all EU commissioners would join him in resigning.

To further stir the pot, President Bush was to meet this week with EU leaders. Can a dose of Texas diplomacy calm the EU's troubled waters? Stay tuned…

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