Finland to keep Article 141 agricultural subsidies for six more years

Prime Minister: "Subsidies that cause overproduction very hard to justify"

Mariann Fischer Boel

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Farmers in the south of Finland will continue to get domestically provided agricultural support under Article 141 of Finland's accession treaty to the European Union for another six years.
      An agreement on the matter was ironed out by Finnish Minister of Agriculture Sirkka-Liisa Anttila and European Commissioner for Agriculture Mariann Fischer Boel in Brussels on Tuesday.
     
In 2007 to 2011 subsidies for serious hardship paid by Finland to farmers in Southern Finland will decline by an average 2.7 per cent a year. The level is equivalent to the proposal made by Finland to the Commission.
      The Commission had originally demanded that the decline in the first four years would have been steeper - 12.5 per cent a year. Anttila says that turning the Commissioner's head in the matter was the most difficult task of the whole autumn.
      Anttila called the result of the negotiations a "moderately good achievement". She praised Prime Minister Matti Vanhanen and other government colleagues, as well as Commissioner Olli Rehn, for their background support.
     
Prime Minister Vanhanen was very satisfied with the solution, which he said has the support of all government party groups.
      Vanhanen says that the decision is in line with overall EU agricultural policy, under which the trend is to move in the direction of subsidising individual farms, rather than production. The paying of subsidies under Article 141 has coincided with an overproduction of eggs and pork.
      "It is very difficult to defend national subsidies that cause overproduction and disturb the market", Vanhanen emphasises.
     
Next year Finland will be allowed to pay out EUR 93.9 million in subsidies under Article 141.
      After four relatively fat years of subsidies will come two leaner years. The sharpest decline will be in 2012, and in the final year, 2013, the total amount of subsidies will be only EUR 62.9 million.
      Finland hopes that the gap might be made up through the EU's Less Favoured Areas (LFA) supports, which are seen as a way to help farmers deal with the time that comes after the present subsidy period expires.
      "What is especially valuable is that at the end, we will start creating mechanisms with which we could gradually move to a more permanent arrangement", Vanhanen says.
     
The problem is that the sums of money involved in LFA subsidies, and its scope are not yet known. The package remains open at the whole EU level. Anttila feels, nevertheless, that it is clear that there will be LFA subsidies from 2011.
      "We have negotiated seriously about this", Anttila says.
      Vanhanen says that he believes that the matter will be settled while the present Commission is in power.
     
The cuts in subsidies will have their greatest impact on pork and poultry production.
      The Commission did not show any understanding for continued support for pig and poultry farming, whose subsidies will be completely disengaged from production during 2009.
      Small pork and poultry farms are to be encouraged to end production. Farmers who do so will be entitled to subsidies for two years after production has ended.
     
The executive of the Central Union of Agricultural Producers and Forest Owners (MTK) was disappointed with the result, which differed considerably from the joint proposal drafted for negotiations by MTK and the Ministry of Agriculture and Forestry.
      MTK has calculated that the decision reached on Tuesday will cut subsidies for pork and poultry farms by more than 60 per cent. "The government programme states in two places that farmers' income is to be raised. This proposal weakens it", emphasises MTK Chairman Michael Hornborg.
      In his view, the government must find ways to improve the income level of farmers in the Southern Finland either by increasing income, or by reducing energy taxation, for instance.
      Sirkka-Liisa Anttila is to meet with MTK representatives early Wednesday morning. The delegate council of MTK will begin a two day meeting on Wednesday, and the 141 agreement is expected to figure highly on the agenda.


Previously in HS International Edition:
  No agreement in Brussels talks on future of Article 141 agricultural subsidies (22.11.2007)
  Vanhanen sees Article 141 as the only way that Finland can secure livelihood of its farmers (24.10.2007)
  European Commissioner for Agriculture: Finland has enjoyed 13 years of fair treatment (23.10.2007)
  Vanhanen trusts Commission´s "sensitivity" in farm subsidy issue (22.10.2007)
  Nordic partners stop lobbying against Finnish agricultural subsidies (23.11.2007)
  Finnish Minister of Agriculture continues lobbying for future subsidies (27.11.2007)

Links:
  The Central Union of Agricultural Producers and Forest Owners (MTK)

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