European Parliament gives green light to huge farm subsidies deal

STRASBOURG, France (Reuters) – The European Parliament approved the biggest reform of farm subsidies in decades on Tuesday, in a vote that switches cash to smaller farms and rewards sustainable farming methods.

The Common Agricultural Policy (CAP) has long been criticised for handing the bulk of the subsidies to big landowners and agro-industrial firms.

The reform will change that, its backers say, even though green groups say it does not do enough to protect the environment and fight climate change.

“Farming will be fairer and more sustainable,” said Norbert Lins, who chairs the European Parliament’s agriculture committee, calling it the biggest reform since 1992.

The CAP, worth around a third of the EU’s 2021-2027 budget, will spend 387 billion euros ($436 billion) on payments to farmers and support for rural development.

The new CAP rules, which will apply from 2023, aim to shift money from intensive farming practices to protecting nature, and reduce the 10% of EU greenhouse gases emitted by agriculture.

The reform will require that 20% of payments to farmers from 2023-2024 being spent on “eco-schemes”, rising to 25% of payments in 2025-2027. It does not define an eco-scheme, but examples could include restoring wetlands to absorb CO2, or organic farming.

At least 10% of CAP funds will go to smaller farms and all farmers’ payments would be tied to complying with environmental rules.

The reform also creates a 450-million-euro crisis fund in case agricultural markets are disrupted by an emergency such as a pandemic.

Peter Jahr, an EU lawmaker who helped foster the deal, said it was far from perfect, but that at some point compromises had to be reached so it could get a green light.

“I’m urging you, please, in the interest of the European farmers, in the interest of the climate, to vote in favour,” he told the European Parliament earlier in the day.

($1 = 0.8892 euros)

(Writing by Ingrid Melander, editing by Timothy Heritage and David Evans)