France, Germany seal deal on EU farm budget freeze

Germany and France endorsed a European Commission proposal for a nominal freeze in agricultural spending at 2013 levels from 2014 to 2020 as budget talks for the period enter the final stage, a joint statement said on Wednesday.

Germany is the largest contributor to the European Union's budget and France the largest beneficiary of farm subsidies under the Common Agriculture Policy (CAP), which consumes about 40 percent of the bloc's total budget.

The agriculture ministers of the two countries, Ilse Aigner and Stephane Le Foll, met in Berlin on Tuesday.

"They (the ministers) support the Commission's proposal to maintain the agricultural budget to the nominal level of 2013 for the period 2014-2020," a statement said.

Officials hope to conclude negotiations on the EU's next long-term term budget, worth almost 1 trillion euros ($1.3 trillion) over seven years, by the end of this year with EU leaders due to discuss the issue at a November 22-23 summit in Brussels.

The joint statement stressed the CAP's importance for growth, employment, environment and innovation in Europe's rural areas as well as for maintaining global food production, and noted that farm spending was already facing a real terms decline as part of the European Commission's proposals.

Aigner and Le Foll opposed calls from some countries to cut direct payments to farmers, which make up the largest part of the CAP budget at about 40 billion euros a year, out of a total of 55 billion.

Countries calling for a cut in direct subsidies include Britain, Sweden, and the Netherlands. Cyprus, which currently holds the EU presidency and thus leads talks on the budget, has said that cuts to all areas of the EU budget are inevitable.


Paris and Berlin would be prepared to see a convergence of direct payment levels between member states, provided it was reasonable and gradual, the statement said.

Most farmers in former communist EU member states, currently receive less than the EU average.

The ministers also agreed on the need to maintain EU sugar quotas until 2020, in contrast to the Commission's proposal to end production quotas and minimum beet prices from 2015.

The Commission's proposal was designed to boost output and avoid sugar shortages on the European market, while allowing an increase in EU sugar exports.

The ministers supported the Commission's proposals to make a third of direct payments conditional on farmers meeting new environmental criteria, although they argued for less prescriptive rules than those proposed by the EU executive.

"They call for a more efficient implementation at administrative level and asked the Commission to demonstrate the necessary flexibility to ensure a pragmatic application," the statement said, adding that a joint working group had been set up to look into the matter.

($1 = 0.7751 euros)

(Additional reporting by Charlie Dunmore in Brussels; editing by Hans-Juergen Peters and Keiron Henderson)