GHY Tradelines

(International Herald Tribune – James Kanter)

European Union governments agreed Thursday to overhaul the way the trade bloc distributes tens of billions of euros in subsidies to farmers. But some said the measures did not go far enough and risked skewing markets.

The measures, which cover the period from now to 2013, are aimed at revamping a decades-old system in which farmers automatically earned money for farm products whether there was market demand or not. That system has been attacked at the World Trade Organization for making Europe less likely to import more competitive farm products from outside the bloc.

The measures represent the biggest reform of European farming policy in five years.

Even so, critics said the measures, which were hashed out Thursday morning after all-night talks in Brussels, were only a partial shift in policy rather than a wholesale reform of the €43 billion subsidy system.

“I regret what has been conceded in order to secure a deal which will lead to some new distortions in the short term,” said the British environment secretary, Hilary Benn. “We want to see further changes for the benefit of farmers, consumers and the environment and will continue to press for this.”

The Common Agricultural Policy absorbs more than 40% of the annual EU budget of more than €100 billion, or $125 billion, although the bloc’s 13 million farmers represent only about 3% of its population. Read the rest here.