On November 27, the German Marshall Fund and the Netzwerk Europaeische Bewegung (NEB) hosted a public event on the "Distribution of Farm Payments in Germany" in Berlin.  At the event, GMF launched a new study prepared by Prof. Dr. Harald von Witzke on the "Distributive Effects of Direct Payments in German Agriculture and the New Common Agricultural Policy (CAP) of the European Union."  Other panelists discussed issues related to transparency in farm payments and agricultural policy reform from a variety of different perspectives.

GMF Senior Transatlantic Fellow Dr. Ulrike Guérot, and Christoph Linden, Vice President of NEB, gave opening remarks, following which Dr. Michaele Schreyer, former European Commissioner for Budget and Financial Control, argued for a redefinition of the goals and priorities of the Common Agricultural Policy.  Transparency, she contended, would be a first step in this direction, as well as being the best means for fighting corruption. The European Commission launched its new transparency initiative in November 2005: all EU member countries will have to make recipients of CAP payments public starting 2009 (more than 75 percent of the EU budget is administered by the member states).  Transparency has become even more important now that subsidies have been decoupled from production.

Prof. Dr. Harald von Witzke then presented the findings of the study he prepared for GMF. This study laid out for the first time the distributive effects of direct payments in Germany under the CAP. His two major findings were that:

• Direct payments employed under the new CAP contribute about one third of the observed inequality in family farms and almost 75 percent of the inequality in large incorporated farms.
  
  
• Proposed payment limitations of 100,000 Euro and 300,000 Euro would not affect family farms, but would, however, deeply impact large farms, most of which would end up making negative profits. 

Prof. von Witzke concluded that German CAP payments foster economic inequality and keep inefficient farms in business.  Limiting or cutting payments would increase social welfare.

Ken Cook, president of the Washington, DC-based Environmental Working Group (EWG), then talked about the successful farm payments transparency campaign he launched in the United States in 2001. That year, EWG sued for the release of farm payments data and has since published millions of records on their web site.  The goal of their transparency campaign was a re-distribution of money from subsidies to conservation and research as well as food and nutrition assistance.  According to Mr. Cook, the distribution of subsidies in the United States is very different from the payments in the EU.  In the United States, 90 percent of the payments are received by the growers of five different commodities while fruit and vegetable growers are left out.  In this context, information can be a powerful tool, especially given that journalists increasingly lack the time or resources for extensive research.

GMF Fellow Jack Thurston, co-founder of FarmSubsidy.org, then explained that 33 percent of European farm revenue consists of subsidies, with the largest 20 percent of European farms and food companies receiving 80 percent of the subsidies.  There are also very different levels of transparency in farm payments in different European countries.

Tanja Draeger de Teran of WWF Germany then described the "Wer Profitiert?" German transparency initiative which began campaigning in 2006.  This group of NGOs has differing goals but one common aim: to push for disclosure in German farm payments for the sake of transparency and to start a discussion about a better distribution of payments (perhaps based on farm size, number of employees, type of farming, etc).  She argued that the campaign successfully softened the initial resistance of the German Economics and Agricultural Ministries as well as the Bundesrat.  There are additional problems of transparency problems arising from Germany's federal system: farm subsidy data is administered by the German lander and is thus spread out across 16 different data bases.

Finally, Brigitte Alfter, Brussels Correspondent of the Danish daily Information, talked about farm payment fraud and the link between payments and cheap agricultural exports to developing countries.  She argued that it was time for a CAP "health check" and that the concept of income subsidies, invented to help a starving Europe in the 1950s, needs to be adjusted to today's realities.

The discussion that followed the presentations centered on the issues of farm payments and job creation, lack of governmental responsiveness, and the different levels of transparency within Europe.  The event was attended by an audience of 55 people, mostly party, government, NGO, embassy, trade union, and private sector representatives, as well as journalists.