A Romanian proposal for the future of European small farms

Policy Brief No. 7 May 2011

Author: Lucian Luca

CRPE launches the report ” Multi-Annual Subsidy Decoupled from Surface Area – a Romanian proposal for the future of European small farms –”.

In November 2010, European Commissioner Dacian Cioloş released “the Common Agricultural Policy (CAP) towards 2020” – a document outlining the broad strokes of the reform of the European agricultural policy. The communication will be followed in 2011 by a legislative proposal by the Commission. Thus, we are currently in the stage between general principles and concrete measures. In this context, CRPE proposes a subsidy scheme for small farms that would facilitate:

a)giving small farmers access to funds – for those with economically viable commercial operations

b)encouraging the sale of land to those will small holdings without commercial potential.

We propose to eliminate the annual subidy request by farmers. Farmers would submit a single request, at the beginning of the European financial programming period (not 7 years). and would subsequently receive the same subsidy for the following seven years, even if they sell the respective land (with the new owner working the land but not receiving the subsidy for it).

This lump multiannual lump sum payment that is not tied to land area would stimulate the sale of small holdings and the development of mid-sized farms. A peasant would be able to sell his land and continue receiving the subsidy for seven years. Thiswould eliminate the tendency for farmers to hold onto unworked land in order to receive the subsidy through annual requests The effect could be similar to that for the “lifelong annuities” program, but on a much larger scale, over a shorter time span, and with greater chances of helping mid-sized farms consolidate.

Our proposal would produce different effects for two different categories of farmers:

– farmers with small holdings – encouraged to sell

– for farms defined as mid-sized by Romanian standards (e.g. over 10 ha) it would create growth opportunities by bringing onto the market small pieces of land from the immediate vecinity of currently existing operations

The report can be downloaded here.