Farm experts at the European Commission will have to rethink how extra subsidies are paid to Europe's poorest areas ahead of a debate by EU ministers at a meeting next week, officials said on Tuesday. The Commission has been under attack for years over how it defines regions considered as disadvantaged and so eligible for higher farming subsidies. Such status can be claimed for mountainous regions, areas with 'specific natural handicaps' and a vague category of zones defined on socio-economic criteria, which is at the crux of the debate.
More than 96 pct of Luxembourg is deemed a disadvantaged agricultural area, a status unchanged since 1975, as is nearly 75 percent of Ireland.
At least half the farms in the old EU-15 qualified for the bloc's supplementary less-favoured area subsidies at an annual cost of 2 billion euros, half coming from Brussels. Data from the EU's 10 newest joiners is sketchy.
The loudest critic of the system has been the European Court of Auditors, the EU's financial watchdog.
In 2003 it detailed widespread financial abuse of the system and called for sweeping changes to end the huge differences in subsidy payouts among member states.
This week farm experts from the 25 member states broadly rejected Commission plans to revise the criteria, effectively sending the EU executive back to the drawing board.
The Commission plan would have brought a 20 percent net fall in disadvantaged areas, with a drop of more than 45 percent in six countries and a rise of more than 60 percent in four others.
"The Commission ... managed to get all the delegations against them," one EU official told Reuters.
"All delegations recognise the need to change the situation. But we need to tighten the criteria," he said.
Now the idea seems to be for the Commission to toughen up the rules and add at least a few more options to definitions, though mountainous regions and those with other specific natural handicaps should remain untouched.
One option under consideration, proposed by Finland and backed by several northern EU governments, is to use national crop-growing periods as a measure of eligibility.
Some of the EU's non-mainland territories, such as the Azores and Canary Islands, might also win exemptions and be able to continue using the current criteria, officials said.
The issue is one of the trickiest parts of wider negotiations on rural development policy due to be agreed in June by EU governments, all keen to protect their share of a large pot of cash handed out each year in rural subsidies.