28 Jun 2013

EU move to cut subsidies won't benefit NZ much - envoy

7:03 am on 28 June 2013

A move by the European Union to slash subsidies to farmers is not as big a deal as it sounds.

The EU on Wednesday announced cuts to the subsidies it pays industrial-scale farmers of up to 30%.

The Common Agricultural Policy - which subsidises farm incomes - is the organisation's largest and single most expensive policy, costing €50 billion per year, or two-fifths of its budget.

New Zealand special agricultural trade envoy Alistair Poulsen said the new package is really only fiddling at the margins and won't make much difference to New Zealand farmers.

He said it's positive that some of the anomalies have been highlighted through the adjustment, but it's really only fine tuning and will only involve a small amount of money over the whole scheme of things.

Mr Poulsen said New Zealand will continue to be denied access for all sorts of products including beef and some of the other tariffs on products like cheese and butter are restrictive and costly.

He said New Zealand trade will continue to be restricted and will be largely unaffected by the changes.

Mr Poulsen said the cuts are a political response to wealthy, large scale farmers who have been reporting that they have been getting subsidies of more than €1 million or £1 million, depending on the country.

He said consumers and taxpayers in Europe are generally very supportive of farmers which has allowed them to keep the subsidy system, but since the global financial crisis there has been a subtle change in attitude about reducing budgets.

Mr Poulsen said it's positive for New Zealand farmers that there is focus on farmers getting subsidies that they don't need.