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EU approves millions in aid for dairy farmers

The European Union backed some $420 million in special aid for the dairy sector on Monday, hoping to quell a season of unrest in agriculture.
Luxembourg EU Agriculture
A farmer bangs an empty milk can as he stands under a sign which reads 'A fair price for milk' during a demonstration outside of an EU agriculture ministers meeting in Luxembourg. Geert Vanden Wijngaert / AP
/ Source: The Associated Press

The European Union backed some 280 million euros ($420 million) in special aid for the dairy sector on Monday, hoping to quell a season of unrest in agriculture.

Yet the move by farm ministers was not enough for those who work the land. Angry farmers pelted police with eggs and buckets of milk and choked traffic in one of Europe's financial capitals with their tractors, demanding more subsidies and more protective measures to shield them from world markets and the financial crisis.

Protesters even lobbed burning tires into the EU compound where the 27-nation bloc's farm ministers were meeting.

The European Union has been trying for years to wean farmers off subsidies to face the world markets on their own, yet a global drop in demand amid the credit crunch has caused prices to plummet. Facing increasing debts and bankruptcies and producing food at a loss, EU farmers have grown increasingly militant this fall.

The hundreds of billions of euros that EU governments have spent bailing out banks and carmakers in the last year has made the situation sting even harder for farmers.

"They have found money to bail out banks and also to bail out the automobile industry. Surely the agricultural industry and the food industry across Europe is every bit as important as those sectors," said Padraig Walshe, the head of the European farm federation COPA.

"We would have liked a billion," said Gerd Sonnleitner, President of German farm federation Deutscher Bauernverband.

"(But) when it comes to agriculture, they talk about financial discipline," he added. "That is an immoral policy."

What EU farmers can do is put on a protest that gets attention — and results. Over the past weeks and months, they have torched bales of hay in the streets of Brussels, Luxembourg and Paris and sprayed truckloads of milk onto fields — all while lobbying countries like France and Germany, where agriculture is still politically sacred.

For dairy farmers, that paid off.

EU Farm Commissioner Mariann Fischer Boel said the 280 million euros she proposed was her "contribution to try to set an end to these protesters in the streets."

But Fischer Boel said she was forced "to empty my pockets" to meet the demands of 21 of 27 member states seeking some 300 million euros ($450 million) in further subsidies. Britain and the Netherlands were among those EU nations against further aid.

Monday's protest by some 2,000 farmers and 400 tractors paled in comparison to the tens of thousands of farmers and the violence that marked huge rallies in the 1960s and 1970s, which set EU farm policies that backed near-unlimited production at guaranteed prices.

"We are not radicals," said Erwin Schoepges, a Belgian milk farmer at the march. "But see, dairy farmers haven't made money for a year. Many are crying at home."

Luxembourg had mobilized one policeman for every two farmers on Monday, underscoring the reputation of such protests.

"If nothing changes quickly, I really fear that it will increase violence," Schoepges said.

Yet even if Monday's concession eases the strain on dairy farmers, the same financial squeeze has also struck the cereal, sugar beet, pork and beef sectors. They could now be left in the cold because the commitment to milk farmers in next year's farm and rural development budget 52 billion euros ($78 billion) has reduced the chances for other rescue plans.

Despite the new money, EU farmers and many member states still insist on some protective measures to keep them insulated from fluctuating world food prices — a longtime policy EU lawmakers are trying to unwind.

In Europe, strict regulation with high guaranteed income after World War II turned the memories of wartime hunger into an overproduction nightmare that created warehouses full of butter mountains and lakes of milk and wine. Subsidies to export into world markets kept European farmers in business while those in developing nations could not compete.

Europe was hardly the exception, as trade giants like the United States and Japan also made sure to protect key products from cotton to rice.

World trade negotiations have been trying for years to open up farm trade to greater global competition, but France, Spain and Germany, with strong farm lobbies, have been applying the brakes.

Starting in the 1990s, the EU set out to wean itself of subsidies by cutting the automatic link between funds and production, and limiting the use of quotas to keep prices artificially high.

Even if the EU made a concession Monday, the EU farm chief said member nations would move ahead with reforms.

"Nobody wants to return to the old-fashioned regime of the sixties and seventies," said Fischer Boel.