News - February 3, 2012

Greece would suffer from EU agricultural policy reform

Joris Tielens

The European Commission wants to redistribute agricultural subsidies in Europe. This will affect countries already suffering from the euro crisis, suggest figures from the Agricultural Economic Institute LEI.

The support Greece receives from the European agricultural policy between now and 2020 will be cut by more than a billion euros, if proposals by the European Commission are accepted. The Netherlands is going to have to make sacrifices too, as are Italy, Germany and France. The countries that will come out of the reforms as the big winners are the new member states in eastern Europe.
This forecast is based on calculations made by researcher Roel Jongeneel at the agricultural economics institute LEI. Farmers across Europe receive different levels of subsidy per hectare of farmland. The proposal made by the European Commission last autumn is to reduce these differences. No one had yet calculated exactly what this would mean for the various countries. Jongeneel calculated the effects of the change in the hectare subsidy.
Even countries already hard hit by the euro crisis can expect to receive less support for their farmers from the agricultural policy in future. Greece has always received hefty subsidies per hectare but will be receiving over one billion euros less up to 2020. This is 0.5 percent of the country's national income. Italy stands to lose the most of all the euro zone countries, at over 1.5 billion euros up to 2020. France and Germany are set to lose more than a billion each as well. And other member states such as Belgium, Denmark, Spain and the UK will lose too.
The only country in the 'old' EU set to gain from the reform is Portugal. All the other winners are new eastern European member states. Romania will do particularly well, receiving 3.8 billion euros more up to 2020. Bulgaria will receive significantly more, and Poland, Latvia and Lithuania will gain too.  
The Netherlands
Apart from Malta, which hardly has any agriculture, the Netherlands currently receives the most support per hectare of all the EU states. So it is going to lose a lot, relatively: 6.67 percent, the biggest reduction in percentage terms. This means 388 million euros between 2014 and 2020, or 55 million per year. Within the EU, more than 900 million a year will shift from the older member states to the new member states in eastern Europe. A modest redistribution in the light of the total budget for the European agricultural policy: 60 billion per year.