EU moves to 'green' its farms in reform effort

The EU called for a greener, fairer farm policy on Wednesday as it moved to radically overhaul its Common Agricultural Policy (CAP) by capping subsidies and tying them to environmental concerns.

"The CAP must be redefined," EU Agriculture Commissioner Dacian Ciolos told the European Parliament, outlining a sweeping plan to reform the EU's controversial farming subsidies from 2014 -- a plan set to trigger months of heated debate.

Among his proposals to rethink the CAP, which traditionally accounts for about 40 percent of the bloc's annual spending of nearly 140 billion euros, is a call for 30 percent of EU direct farm subisidies to be conditional on respect for the environment.

The measures include crop diversity, maintaining permanent pastures and creating ecological fallows that are havens for plants, animals and insects on at least seven percent of arable land.

Ciolos said the reforms would lead to an agricultural U-turn, putting Europe's 12 million farms on the road to "sustainable practices" after years of free for all.

To even out subsidies in the interests of fairness, Ciolos wants to cap payouts to farmers at 300,000 euros ($424,000) per year. In addition, levies would be applied progressively on all payments exceeding 150,000 euros.

While highly-mechanised large farms would be hit, those using a large number of workers could win exemptions as salaries could be deducted from the handouts.

Germany, the Netherlands and Britain -- where the royal family are major beneficiaries of the subsidies -- strongly oppose capping subsidies on the grounds it could lead to a carve-up of large farms.

Large farms remain the rule across Europe, with EU data this week showing that over the last seven years, the number of farms has decreased 20 percent but the average size has come down only two percent.

Likewise in the interests of the environment, Ciolos is proposing to gradually favour extensive rather than intensive farming by progressively calculating subsidies per hectare (acre) from 2014 to 2019, rather than basing payments on production, as has often been the case.

The proposals are intended also to address squabbling between member states on their respective quotas, with newer members from eastern Europe complaining more money goes to founder states.

However, while France, currently the top beneficiary, would see a 1.5 percent fall in the 2014-2019, it would remain the largest recipient.

Romania, Bulgaria and the three Baltic nations would see an increase -- in Romania's case of 33.7 percent. But eastern EU members would continue to be behind the older EU members, with Latvia notably 54 percent below the average.

"Politics, especially at the European level, is the art of what is possible," Ciolos said. "The most important thing is to launch movement in the right direction."

Responding to criticism from the EU's Court of Auditors, the commission proposals also seek to ensure subsidies go only to "active farmers" -- rather than to airports or golf-clubs, as has sometimes been the case.

The reform proposals will have to be approved by both the parliament and all member states before taking effect.

But critics are already making their voices heard, with an angry response from Europe's leading farmers' organisation, Copa-Cogeca.

"At a time when the Chinese are massively purchasing land in Africa, we are being asked to leave seven percent of our land fallow," said German Copa-Cogeca official Gerd Sonnleitner.

The group said the reform would leave six to seven million hectares idle.

Bio-innovation leader Novozymes meanwhile said the proposals failed to go far enough.

"A bio-based economy can foster the transition of Europe's agriculture towards an economically and environmentally competitive sector," it said in a statement.

"However, we are disappointed that the current proposal falls short in delivering concrete measures."