Paris vows to block radical farm reforms

Sweeping changes to the way the European Union spends more than €40bn (£26bn) in subsidies to its farmers were proposed by the European Commission yesterday, provoking instant opposition from agriculture unions and from several national capitals, including Paris.

The measures would bring about the most far-reaching reform in the history of the Common Agricultural Policy, ending incentives for farmers to boost food production.

The CAP has been criticised for encouraging intensive farming, damaging the environment and encouraging the spread of diseases such as BSE and foot- and-mouth. Romano Prodi, the Commission's president, said yesterday the EU's 7 million farmers could not ignore external pressures.

Under the plans, farms would be paid a flat rate based on previous income, a sum that would be dependent on meeting standards for protection of the environment, food safety and animal welfare. These direct payments would be cut by 20 per cent over six years or so, with the money being put into a fund – jointly with member states – to help rural development, including projects such as organic farming.

Small farmers would be protected because the first €5,000 in payment would be exempt from cuts. But there would be a ceiling on direct payments of €300,000 a year, hitting the millionaire cereal farmers of East Anglia and large industrial farms in France and eastern Germany. That would help to counter the practice in which 80 per cent of the CAP goes to 20 per cent of farmers, some of whom pick up as much as €2m in subsidies.

The package of measures, presented by Franz Fischler, the commissioner for agriculture, would also reduce the money put into supporting prices for cereal by 5 per cent and abolish intervention in the market for rye. Supporters of the reforms argue that scrapping incentives to increase production would help the EU in world trade negotiations.

The proposals herald the start of a lengthy battle over the future of the policy. Those countries that want reform, including Germany and Britain, are anxious to get a promise of change before the EU agrees to admit up to 10 new countries in 2004. Margaret Beckett, the Secretary of State for Environment, said the reforms were "on the right lines" but did not go far enough in curbing spending.

But big beneficiaries, including France, Ireland and the Mediterranean countries, are digging in for a battle. Mr Fischler said he expected no final decisions until next spring; although the reforms could be decided by majority voting among agriculture ministers they are more likely to go to a full summit of EU leaders, where any head of government can veto. France will try to block the reforms, even though Brussels insists they will directly benefit the traditional farmers and small rural communities Paris claims to defend.

The French government and farming unions said the proposals sounded the death knell for smaller farmers. Jean-Michel Lémetayer, head of the main French farmers' union, said the plan would drive half the 680,000 remaining French producers off the land. Even the Conféderation Paysanne, the small farmers' union, run by the anti-global campaigner José Bové, rejected the reforms.

But French farmers have been leaving the land in droves under the old CAP and will continue to do so. France is no longer just a country of small farmers. It is the world's second largest exporter of food and fourth largest producer of cereals. It is the cereals producers who would be directly penalised by the plans to cut support prices and reallocate direct CAP subsidies.

Both the government in Paris and farmers' unions, large and small, fear that the switch to direct subsidies to farmers, started 10 years ago, will reinforce demands from Germany, Britain and others that each EU country pay for its own farmers. As the largest single beneficiary from the £43bn CAP budget – taking 40 per cent of all EU farm subsidies – France has most to lose from such a change.