Study Finds Billions in EU Farming Subsidies Are Being Misspent

A farm in rural England. (Photo via David Mark/Pixabay

BRUSSELS, Belgium (CN) — A large share of European Union agricultural subsidies benefits the wealthiest and most polluting farms in Europe, new research shows.   

The bulk of direct payments from the EU’s agricultural budget goes to farmers in rich regions of the bloc and amounts to paying polluters, according to a study published Friday in the journal One Earth by researchers from Lund University in Sweden. 

The Common Agricultural Policy, or CAP, is the largest section of the union’s 160 billion euro ($189 billion) budget – around 60 billion euros ($70 billion) is spent on direct payments to farmers. Study co-author Kimberly Nicholas, associate professor of sustainability science, said nearly half of that goes to places where average income is above the EU’s average. 

The current system, the study found, is biased in favor of intensive livestock production, in particular the raising of cattle and pigs, which is the most polluting sector of agriculture. 

“This was by far the most difficult and complicated study that I’ve ever worked on,” Nicholas said in an interview.

In 2013, the EU started to require that countries publish a list of who gets subsidy money, but the data isn’t uniform across the 27 member states. Nicholas credits FarmSubsidy.org – a website that tracks agricultural subsidies as part of the Open Knowledge Foundation Germany, a nonprofit organization focused on transparency in public spending – for making much of the data her paper used accessible. 

The study further found that 2.5 billion euros ($2.95 billion) in payments intended for farmers went to addresses in London and other urban areas. That’s because the direct payments program pays a flat fee per hectare for all agricultural land to the landowner who may be renting the land.

“Spending is exacerbating, rather than reducing, income inequality among farmers,” economist Mark Brady, one of the study’s co-authors, said in a statement. 

Established in 1962, CAP is a foundational part of the EU. Financial support for agriculture, to ensure that member states have an adequate food supply, was part of the European Economic Community, the predecessor to the European Union.

“If you’ve been getting this money all along, it’s hard to get people to change,” said Alan Matthews, professor emeritus of European agricultural policy at Trinity College Dublin, who was not involved in the study. 

The EU has long been aware of the problems with agriculture subsidies. Eighty percent of the direct payment subsidies go to 20% of farmers. A 2015 report recommended that the subsidy system be tightened to ensure funds weren’t being misused, but that was dismissed by EU officials.

“We have an almost watertight system,” Rudolf Mögele, deputy director general of the European Commission’s agriculture department, told the New York Times last year.

But a 2019 investigation by the Times showed that not only do subsidies benefit the already wealthy, they also help to prop up leaders like the far-right prime minister of Hungary, Viktor Orbán. Under Orbán’s leadership, the country has backslid away from democracy and into authoritarianism. The Times found that he used the subsidy system to enrich his friends and punish his enemies and found similar misuses in the Czech Republic, Poland, Slovakia and Bulgaria. 

Despite the current system’s problems, it is an improvement over the previous one, which paid farmers based on output and led to massive overproduction.

“There were lakes of milk and mountains of beef,” said Nicholas, one of the co-authors of Friday’s study.

The EU then dumped that overproduction onto the world market, harming farmers in other countries. 

Nicholas said the misspent money could more than cover the 20 billion euro ($24 billion) bill for the EU’s Biodiversity Strategy, the long-term plan for protecting nature and reversing environmental damage. It’s part of the European Green Deal launched by European Commission President Ursula von der Leyen, who took office last year and became the first woman to serve in the position.

Nicholas argued that shifting payments to an income-based system, in which support payments go to farmers in need, would alleviate some of the problems. Subsidies could also go toward encouraging other CAP goals, like developing more environmentally friendly agricultural practices.

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