Brussels seen as farmers' golden calf

Ireland is an island of wonders. Colourfully painted concrete statues of the Blessed Virgin can sometimes be seen moving in Ballinspittle. They have attracted hundreds of thousands of people. "Moving rocks" jump at the harmless farmer on his return from the pub and dent his fender.

Then there is the amazing money stream. "Jesus, the lolly flows into your pocket and you don't have to do anything," says one Skibbereen farmer after a visit from a State farm adviser.

The man in question got to know the world through long hard years in container ships and now as a pensioner has started a cattle business. He is astonished at how easy money is thrown at him.

On inherited and leased land on the coast he has 23 cows and 23 sheep. In order to be an eligible farmer he asked the State for a herd number. That was easy. Without selling a calf, a lamb or a litre of milk he gets several thousands of pounds a year in assistance from Brussels. "Actually, I only have to sit on my behind and watch the animals." He lifted two fingers of his right hand, and saluted with the cap. "Brussels is fantastic."

"In former times we earned our money by producing food," says a farmer from Castletownshend. "Today we earn it by filling out subsidy forms." The biggest problem is keeping informed about the current situation of EU subsidies.

In 1997 some 160,000 Irish farmers earned £940 million alone in direct payments from Brussels. In addition they receive hundreds of millions for the sale of products at guaranteed prices.

The farmer in question has 100 hectares of his own and leased land. His milk quota of 70,000 gallons guarantees him, after costs, an income of £35,200.

He could have collected even more. Recently, an EU inspector had told him the area he farmed had been designated a severely disadvantaged area five years ago. But how was he to know? The pasture is fat and green as before. He lost thousands of pounds in beef headage payments by not knowing.

He should have got a few horses, sheep and goats. Every animal makes money. It's like that only where a farm is located in a disadvantaged area. A cow makes £84, £70 for a horse and £10 for a sheep or goat.

One can also earn money when animals are sold at EU guaranteed prices - a two-year-old calf, for example, will make £600. When it is slaughtered another premium is paid. If one doesn't sell in November as normal but keeps the animal until January to relieve the market then another £60 is paid per animal.

BUT the farmer can also avoid any kind of work. He can surrender newly-born male calves to be slaughtered before they are 20 days old. For this he gets a £90 premium. And on reaching 55 years of age he can retire at the expense of the EU. Without doing anything the farmer is paid £920 per month for 10 years under the early retirement programme.

The Irish farmers profit from regulations which they have not made themselves but which seem to have been made for them. No wonder farmers look at them with envy in other member-states.

In theory no EU state should be put at a disadvantage when direct payments are made. However, the facts are different. The Bonn Agriculture Ministry has a so-called "envy" table in which examples of premiums for beef production for 1996 are listed.

According to this the Irish farmer gets 71p as against the German farmer who gets 18p per kilo. In 1997, the small green island got £0.92 billion for beef alone, while Germany got £0.76 billion.

The EU budget for agriculture makes clear that there is a discrepancy between transfers and receipts. Bonn transfers almost DM22 billion and receives DM11.5 billion, a net payment of DM10.1 billion. The Irish pay DM743 million and receive DM3.3 billion, a surplus of more than DM2.4 billion.

The Germans contribute 29.2 per cent of the EU budget of DM162.8 billion, the Irish contribute 1 per cent. So shall it remain even after the major reform of the CAP, about which the Council of Ministers will meet in informal session in Austria to open hostilities.

The basis of the Commission proposals is to reduce costs and prepare for enlargement by reducing the guaranteed prices for beef by 30 per cent, cereals by 20 per cent and milk by 10 per cent, while drastically increasing direct payments as compensation to farmers.

The Agriculture Minister, Mr Walsh, as a precaution, strongly protested. His country would be severely disadvantaged by this new regulation. "No Irish government, no Irish agriculture minister could accept these proposals," he said at a meeting of his colleagues in Brussels. So it is clear: reform of the CAP will not be cheaper but rather more expensive.

The Irish have fiercely defended their position in the dairy cow programme since 1993. It was set up with the aim of reducing milk production. However, it is limited to farms with a relatively low milk quota of under 115,200 litres. In spite of this, efficient large producers can cream off large profits. They lease land in the name of friends or relatives, buy quota from a neighbour who is retiring and, using a middleman, put the difference in their pockets.

Every individual cow/calf yields a £140 premium per year plus an £84 beef premium in disadvantaged areas, plus a £90 special beef premium for castrated male calves, plus £33 headage for calves in disadvantaged areas, plus £30 extensification premium for cows, plus £30 extensification premium for calves, a total of £407. No bank would give a better interest rate.

For the head of the herd there is also something, namely the special bull premium of £112. Brussels also pays for the virtual cow.

A must for the comfortable farmer is sheep. Everybody has a bit of land for the undemanding wool and cutlet animals. A subsidy of £18 is available everywhere in Ireland for sheep, with an extra £10 in disadvantaged areas.

There are even more possibilities: the programme for the protection of the rural environment, for example. Every Irish farmer is paid £125 per hectare for not removing the typical stone wall. Naturally they would not have dreamt of removing these walls as they were built by their forefathers and because they would have to spend money on more expensive replacement fencing. In addition, farmers are given a subsidy of £150 per hectare when they convert their fields to organic production.

Besides the legal there are also the illegal gains. To prevent this the EU has a small group of 70 inspectors in Ireland. But their struggle is mainly a lost cause. Only 10 per cent of farms are inspected. If one is caught that is mostly not a problem. EU subsidy fraud is not yet covered in Irish law.

The above article is reproduced by kind permission of Der Spiegel