EU allows Finland to keep production subsidies for milk and beef

Anttila: EU understands Finland’s special needs

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At talks among agriculture ministers of the European Union countries on Thursday, Finland succeeded in getting special permission from the EU to maintain a higher level of output-based farm subsidies than other member states. The decision could prove to be a trump card in future agricultural disputes.
      The outcome shows a willingness on the part of the EU to understand the difficulties that Finland’s northerly location poses to agriculture.
      “Finland’s special needs are understood in the EU”, said Minister of Agriculture and Forestry Sirkka-Liisa Anttila (Centre) in Brussels on Thursday, after negotiations with her European colleagues that continued through the night.
      The partial reform in EU agricultural policy moves away from production subsidies, toward the development of agriculture and rural areas.
     
Finland is the only member state to be allowed to keep ten per cent of its subsidies tied to output.
      The linkage with output means that getting the subsidies requires that a farmer actually produce products, such as milk or beef.
      The trend promoted by the European Commission is to move away from output-based subsidies. The idea is to encourage farmers to produce products that the market really needs.
      Mariann Fischer Boel, the European Commissioner for Agriculture, sees the result of the talks as a compromise that allows everyone to go home a winner.
     
The special consideration won by Finland means that milk and beef production will continue to be profitable in Finland. The level of subsidies will not change.
      The Finnish government was not able to achieve its goals on subsidies for starch potatoes. Anttila said that taking up the subject late at night would have meant “opening a Pandora’s box”.
      She says that it would have caused other member states to start demanding additional concessions, and the compromise, which was already fragile, could have collapsed.
      The measures agreed upon in Brussels on Thursday are in force from 2009 through 2013.
     
Agriculture continues to eat up nearly half of the budget of the EU. However, few member states are ready to let go of benefits that they have achieved.
      The trend in the future is toward funding the general development of rural areas, rather than specifically subsidising agricultural output. In Finland, the shift from direct subsidies to rural development is in the range of EUR 6-15 million a year. The money is conditional to getting equivalent national financing.
     
Commenting on the agreement reached in Brussels, Michael Hornborg, chairman of the Central Union of Agricultural Producers and Forest Owners (MTK), said that Finns could end up spending more money on food in the coming years.
      Hornborg said that retail prices of food in Finland might have to rise about ten per cent so that farmers will be able to cover their rising costs.
      In the view of the MTK, the result achieved by Agriculture minister Anttila in the talks was a good one.


Previously in HS International Edition:
  Multimillionaires among biggest beneficiaries of agricultural subsidies (6.5.2008)
  Finland and EU on historic collision course over farm subsidy directive (17.3.2008)
  Agriculture Minister says 141 decision brings agriculture in right direction (5.12.2007)

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