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November 20th, 2008
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Farmers cry foul over subsidy cuts

Proposed budget would mean 700 Kč loss per hectare of farmland

By Stephan Delbos
Staff Writer, The Prague Post
October 1st, 2008 issue

JAN PŘEROVSKÝ/THE PRAGUE POST
Smaller farms would especially suffer from what the Agriculture Ministry calls reasonable subsidy cuts.
Small farms will bear the brunt of proposed subsidy cuts for the agricultural industry in the draft 2009 budget, say farmers who fear their livelihood may be at stake.
The draft budget, which the government approved Sept. 22, includes a 9 billion Kč ($543.5 million) cut in subsidies to farmers. The cuts, part of an effort to reduce state deficit, will mean 700 Kč less per hectare in direct payments to farmers. Though analysts believe the budget will be modified in light of recent economic turbulence, the Agrarian Chamber and the Association of Private Agriculture ČR (ASZ ČR) plan to protest the move in early October. Some are optimistic that the Finance Ministry will amend the budget in favor of farmers.
“We still believe an agreement is possible,” said Ondřej Veselý of the Agriculture Ministry.
Agricultural subsidies have become the subject of controversy in the European Union as the European Council has called for fewer handouts to farmers and a reform to the system. France, current holder of the EU presidency and Europe’s biggest farming power, has been the most vocal in its opposition to any cuts. President Nicolas Sarkozy has stressed that subsidies must be maintained, especially during a global food crisis that has seen prices skyrocket. Farm subsidies make up the single biggest item in the EU budget at 40 percent.
Czech farmers currently receive yearly payments of 5,000 Kč per hectare of farmland. The cost of payments is split between the government and the EU. Under the proposed budget, payments would be lowered to 4,300 Kč per hectare. Since farms receive the same rate of payments per hectare across the board, the Agriculture Ministry claims farmers will be equally affected by the cuts, no matter how much land they own.
“The cuts will influence all farmers, including organic and common farmers, big and small farms. The influence will be the same for all of them,” said Veselý.
Doing the math
But ASZ ČR says small, independently operated farms in less desirable agricultural areas such as the Krkonoše Mountains will be harder hit because their smaller harvests mean bigger dependence on government aid.
“Farmers and families on smaller farms will have bigger problems with receiving less money,” said Stanislav Němec, president of ASZ ČR.
Farmers with larger acreage argue that more land means an even greater impact, however.
“My farm is 560 hectares,” said Němec. “If you do the math, you’ll see that the cuts will have a big effect.”
The Agriculture Ministry says subsidy cuts to farmers are reasonable in light of the current economic situation, and the overarching goal to reduce the state deficit means all levels of government will be affected.
“The whole state budget has been cut and the [budget] of the Agriculture Ministry is no exception,” said Veselý. “The Finance Ministry saw room for cuts in our department, so they cut.”
But farmers say the cuts are unfair, as the government promised them the funding and other ministries, such as education, are receiving an increase in funds.
“We know the condition of the budget and that it’s difficult for the government to find the money,” said Němec. “On the other hand, we think the government should live up to its promises. They proclaimed that they would give farmers the highest funding possible.”
Under current EU regulations, Czech farmers are entitled to receive subsidies amounting to 90 percent of those received by farmers in neighboring countries such as Austria and Germany. Direct payments in the 2009 budget reach 78 percent of those received by farmers elsewhere.
Keepers of the land
Farmers agree that the proposed budget is unacceptable, but there is disagreement about how to tackle the issue. The Agrarian Chamber is planning a protest, the details of which will be announced Oct. 3.
“I don’t yet know exactly what the protest will be,” said Zlata Kokoličková of the Agrarian Chamber. “Farmers are angry that agriculture will be cut the most. Farmers hope there is some possibility to get more money from the budget, but there must be some will from the government.”
ASZ ČR says it will not support the Agrarian Chamber’s protest, preferring a more direct route to discussion.
“We’ll meet with the agriculture minister, and we won’t participate in the rally,” said Němec. “We understand the situation and don’t want to make more problems,” he added.
The profit a farmer can reap from his land depends not only on the size of his farm but on the soil’s condition. Farms in mountainous Czech regions produce few crops due to poor soil and geographical conditions. These farms are seen as land caretakers rather than food producers and are almost completely funded by the government, making it especially difficult for them to function with decreased subsidies.
“These types of farms keep the countryside clean and green, so the government pays for them as public services,” said Němec. “They are much more dependent on the state budget.”
Until an agreement is reached and the budget is officially modified, some farmers remain optimistic, saying any cuts would be a significant but not devastating blow to their livelihood.
“It is a bad situation, but not a fatal one,” said Němec.

Stephan Delbos can be reached at sdelbos@praguepost.com


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