BRUSSELS, Belgium – Franz-Josef Feiter and Maria Zuber smiled when they heard the cheeky question, although their reasons were different.
Is it true, they were asked, that when four million poor farmers joined the European Union with its lucrative Common Agricultural Policy, there was a run on wheelbarrow purchases so they could transport all those subsidy cheques from the mailbox to the farmhouse?
Feiter, secretary general of the general European farm organization COPA, representing the seven million farmers in the original EU 15 and now the four million producers in the 10 countries that joined May 1, 2004, recognized in the question the world view of European subsidies as a rich program that subsidizes inefficient farms.
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But it’s not really about the money, he said in his office down the road from where the European Commission administers the CAP program.
“It’s true that direct income payments will be available and they can take advantage of that but really, I think the big impact will be money that is used to invest in the farms, in expansion and development,” he said. “I think in many cases those farmers will be better off but it often will be by leaving the farm.”
For Zuber, the Brussels representative of the Polish Farmers’ Circles, the smile was at the thought that membership in the EU suddenly put Poland’s 1.5 million farmers on easy street.
In fact, money from Brussels replaces subsidies the Polish government once paid to keep input costs low but abandoned when EU membership took effect.
“The direct payments are good, of course, but they have been eaten up by higher costs of production so most farmers do not think they are better off,” said Zuber. “Investment dollars will help some expand, but in Poland, I think smaller farmers are the victims of EU enlargement.”
There is evidence to support both arguments.
Under the terms of entry into the EU for the 10 newest members – Poland, Hungary, the Czech Republic, Slovenia, Slovakia, Estonia, Malta, Latvia, Lithuania and Cyprus – farmers receive a direct payment of approximately $70 per acre.
The EU commitment is being phased in over the next seven years and national governments are supposed to pick up the difference until full EU subsidies flow.
It meant close to $2.5 billion was sent to the new members from Brussels last year and it will increase to $10 billion annually by 2013.
Since most of the new farmers have small holdings, the cost of pesticides, fertilizer and other inputs have soared and most of the money is not tied to production, EU officials predict that many will use it as an income supplement and try to get work off the farm.
Feiter, who watched first hand as a senior German agriculture ministry official when East Germany was united with West Germany in 1990, said there will be farm sector disruption and the key is to have growth in the general economy.
“The idea is that they will realize they have a better chance outside farming than staying on these little farms,” he said. “But they have to have alternatives and if other sectors are developed, farmers will be happy to go. The key is not to push farmers out but to entice them.”
Still, with rural unemployment in Poland already at 19 percent, Zuber said there are real rural fears that they will be losers. “In general, I can say that our farmers are not happy despite the big promises.”
However, EU officials insist despite the grumbling, poor farmers in the new member countries are better off. EU statistics say that in the first year of expansion, income increased on average almost 54 percent in the new states.
Not everyone believes the statistics tell the truth.
