Large-scale Danish farms benefit disproportionately from EU aid

COPENHAGEN, Denmark (CN) — Nearly a quarter of the lucrative EU subsidies intended to buoy Danish farmers goes to the largest 10% of farms, records show, fueling concerns that small farms won't be able to compete in the marketplace.

The European Union earmarks around a third of its joint budget for annual agricultural support to allow farmers in its 27 member to sell products at relatively low prices, help make farming more profitable and ensure a steady and varied food supply in Europe.

Public broadcaster DR reported that despite making big profits, big farms rake in the most EU grants. Denmark receives roughly $6.7 billion kroner ($1 billion) annually, and the money is distributed among 32,000 farms, with 8,000 full-time farmers receiving the majority.

In 2022, the largest top 10% of Danish farms received almost 23% of the country's total EU agricultural funding. However, big operations tend to rely less on government aid compared with small-scale farms, where subsidies make up nearly 75% of their operating profit. For farms with more than 10 employees, that figure drops to 35%.

Kira Marie Peter-Hansen, a member of the European Parliament for the Danish Green Left party, called it problematic that a disproportionally large part of the support goes to the wealthiest farms.

“Especially because subsidies were originally meant to secure stability for the farmers, in particular the small and medium-scaled ones, that could struggle getting by financially,” she said, adding that the Parliament faces substantial work when it comes to making the support more sustainable.

The lawmaker noted that introducing a limit on how much money each farmer can receive would help ensure aid is more effectively distributed.

Data from Danish Statistics show the number of farms in the nation has declined steadily since early 1980s.

EU agricultural support is calculated based on the amount of cultivated land, the number of slaughtered animals and support for green development.

For example, a pig farmer with over 1,235 acres could have received more than 6 million kroner ($1 million) in 2022. In contrast, Ib W. Jensen said his small 150-acre farm on the Danish island of Funen — where he grows corn, canola, zucchini and cucumbers — got around 140,000 kroner ($20,000).

Jensen worries that the disproportionate system will push small operators to shut down, leaving regional megafarms to take over the market. He argues that Denmark needs a redistribution system like many other European countries.

“I would like young people and entrepreneurs to be able to start a small farm without taking heavy loans. There needs to be diversity — both regionally and for the environment. Small farms are often better for biodiversity, because they do not close big areas for production, and you see a variety and experimentation with crops,” he said.

Jensen underlined that state subsidies are necessary for farmers around the world to survive financially. But he says aid should be distributed progressively, like the Danish tax system, where bigger profits mean fewer subsidies.

“The big beneficiaries all have economies of scale, which I cannot achieve as a small farmer. But I still have the same starting costs, responsibility to hand in documents to the Danish Agricultural Agency, perform regular checks, etc. So it does not add up,” he said.

The European Commission has debated imposing an upper limit of 100,000 euro ($108,000) in aid per farm — a suggestion that some advocates have now brought up in Denmark.

The Danish Agriculture & Food Council, a lobby and interest group, does not endorse either an upper limit or a redistribution of funding.

“Since the agricultural support was created and is given to meet certain requirements for the food that is produced, it makes sense that those who produce a lot also receive more support. For Denmark, a redistribution favoring small farms would cost the sector overall,” said the group's EU political chief, Niels Lindberg Madsen.

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