Leiden Law Blog

The end of European agricultural subsidies to agricultural millionaires?

Posted on by Jacobine van den Brink in Public Law
The end of European agricultural subsidies to agricultural millionaires?

For some time the media has paid much attention to the European agricultural subsidies which are apparently paid mainly to big farms and large landowners. Recently the only Dutch television program that is devoted to Europe – De Slag om Brussel (the Battle of Brussels) – also took notice of this. According to the program, in England the European agricultural subsidies are  mainly spent on  the English landed nobility. Queen Elizabeth, for example, apparently receives more than 8 million euros each year for the maintenance of her country estates. The presenters of the program were very critical of this phenomenon: how is it possible that owners of big farmr, rich large landowners and even the English Queen can take advantage of European subsidies? They evidently held the view that European subsidies should only be granted to poor farmers and small landowners.

The European rules on agricultural subsidies do not support this view. European agricultural subsidies are granted to farmers (the so-called direct payments) and to persons who are involved in the improvement of the countryside (subsidies for rural development). None of the European agricultural subsidy regulations require that the applicants’ property may not exceed a certain value. Besides, the European system has the effect that big farms receive much more European agricultural subsidies, simply because they own much more payment entitlements on the basis of the single payment scheme.  The same goes for country estates; as a rule they consist of many acres which results in a higher amount of European subsidies financed by the European Agricultural Fund for Rural Development. In short: at present the European agricultural subsidy system does not take the financial position of the recipient of the European agricultural subsidies into account.  

The European Commission has proposed to make a radical alteration to this in the new financial period 2014-2020, as far as the direct payments are concerned. As solution has been put forward to reduce  the amount of direct payments to be granted to a farmer in a given calendar year if the farmer receives other agricultural subsidies as well. When a farmer receives more than 300,000 euros in a given calendar year, he will receive a maximum amount of 300,000 euros and not a penny more.  This solution tries to avoid disproportionate amounts of payments being allocated to a rather small number of large beneficiaries. This means that Queen Elizabeth will not receive more than 300,000 euros in direct payments for her farms. However, this only concerns proposals from the European Commission; the big question is whether the member states will be agreeable to these plans. Time will tell whether it really will no longer be possible to get rich just by receiving European subsidies.

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