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Arids Roma, a construction company in northeastern Spain, spreads gravel, not seeds, and yet it receives the equivalent of $2.25 million in farm subsidies from the European Union. The Catalan regional government, which requested the money for Arids Roma, says it helps rural development. ''Paved roads connecting the villages aid the mobility of tractors,'' said Georgina Pol Borràs, a spokeswoman for the government.
Indeed, European Union farm aid, the largest program of its kind in the world, goes to many individuals and companies with a far more tenuous connection to agriculture -- including German gummy bear manufacturers, luxury cruise ship caterers and the Queen of England.
For the first time, all of the European Union's 27 nations were forced to disclose this year how they distribute farm subsidies. (Only Germany did not fully comply.) A computer analysis by The New York Times and The International Herald Tribune of recipients in major countries has provided the first detailed look at who receives how much money. The data underscore the extent to which the subsidy program has evolved beyond its original goals of increasing food production and supporting farmers as they weather market fluctuations.
The biggest share of aid, about $53 billion, still goes to
landowners and farmers. But hundreds of millions of euros flow
to multinational companies like food conglomerates and sugar manufacturers,
too.
In France, the single largest beneficiary was the chicken processor
Groupe Doux, which received nearly $89 million, followed by about
a dozen sugar makers that together reaped more than $145 million
in aid.
The sugar processors do not run farms. And Groupe Doux outsources
raising chickens to thousands of contract breeders. But under
the subsidy program, the processors and Groupe Doux qualified
for agricultural export refunds -- rebates to cover the difference
between the European price of a commodity and the lower price
they get on the world market. That is how the German candy maker
Haribo qualified for 332,000 euros in subsidies for the sugar
in its gummy bears.
Ligabue, a Venice caterer that serves airlines and luxury cruise
ships, received 127,000 euros in export subsidies in 2008 for
sugar and dairy creamer packets that it ''exported'' out of Europe
-- in the stomachs of passengers.
European officials and some economists say that much of the cash from those subsidies ultimately trickles down to local farmers, since without them some companies would buy cheaper food elsewhere. But the rebates have a powerful impact on global trade by depressing world prices and undercutting the incomes -- and viability -- of farmers outside Europe, especially in developing countries. It is another form of price support, economists say, a vestige of an old system that encouraged overproduction of food and one that European authorities hope to end by 2013.
It is difficult to know exactly how much subsidy money goes
to nonfarmers. Some of the information the 27 countries provided
was vague, with the real recipients hidden. The European Union
itself says it would be too complicated to calculate such a figure.
European officials say they have simply adapted the subsidy model
to support agriculture in all its modern forms. ''Rural development
is not just about farms. It is also about boosting the rural economy,''
said Michael Mann, a spokesman for the European Commission. ''So
it is perfectly O.K. that nonagricultural businesses get money
for a project that generates jobs and prosperity in rural areas.''
But critics, including farmers' unions and some analysts and politicians,
say Europe has created a ramshackle structure of grant-giving
that has opened the pipeline to wealthy aristocrats who own land
but don't farm it, industrial companies and large multinationals.
Agricultural economists for the nonprofit Organization for Economic Cooperation and Development criticize this ''leakage'' of aid, noting that much of the money goes to ''unintended beneficiaries'' who do not need the subsidy. Harald von Witzke, professor of agricultural economics at Humboldt University of Berlin, argues that the system has lost its bearings. ''I think we need a complete review of the Common Agricultural Policy, including whether farmers should be subsidized at all,'' he said.
Farm subsidies are a controversial economic tool -- and sacrosanct for politicians in the United States and Europe. The European Union pays out more than half its annual budget, around $75 billion, in subsidies, four times as much as the United States. They cost each European Union citizen around $155 a year, according to the European Commission. The money is raised from customs duties, value-added tax and a contribution made by each member country based on its wealth. Europe has moved steadily away from the production incentives of the 1960s, when the goal was to increase the food supply. The practice of tying subsidies to production, which led to vast surpluses in the 1980s, was eliminated in a series of reforms. Europe was shifting more funds away from farmers to a rural development plan that last year paid out $12 billion. The idea was to wean the countryside off its addiction to subsidies by encouraging it to diversify. The money could flow to any number of development objectives, including organic farming, farm tourism, energy projects and rural businesses. National governments were given great leeway in choosing recipients. That is how a gravel manufacturer like Arids qualifies for farm subsidies, as did the Spanish utility giant Endesa, which received $660,000 for installing electrical connections.
David Blandford, an agricultural economist at Pennsylvania State University, said the European Union acted wisely. ''In many rural areas, the future of agriculture and the economic status of farmers really depends on the entire economy,'' he said. Over all, the biggest slice of the farm subsidy cake still goes in direct payments for farmland. But under European Union policy, this land doesn't need to be farmed to qualify. The wealthier the landowner, the larger the handout is likely to be.
The Queen of England qualified for more than $750,000 in farm
aid in 2008 for Sandringham Estate, a 20,000-acre royal country
retreat. A pet project of Prince Charles to preserve the Transylvanian
countryside also received a nominal sum. Prince Albert II of Monaco
collected more than $700,000 in 2008 for his farms in France.
The Duke of Westminster -- the third-richest person in Britain,
with a $10 billion fortune -- collected $800,000 for his farm.
Top Farms, the duke's Polish distributor for his bull-breeding
company, Cogent, collected more than $11 million in subsidies
from 2006 to 2007 for dairies in Poland.
The system also benefits the Catholic Church through many of its
ancient abbeys and convents scattered through Italy, Spain, Austria
and France.
A typical small farmer in Romania might qualify for about $550
in subsidies, and that sum ranges upward for farmers in more prosperous
countries.
Another stream of money goes to big multinational firms, which
can collect subsidies as long as they operate in Europe. One of
them is Cargill -- the mammoth food producer that is the largest
privately held company in the United States, with revenue of about
$170 billion in 2008. Last year, Cargill received at least $14
million, collecting subsidies in eight countries, including France,
Spain, Germany and the Netherlands.
Some economists say the European Union can address potential
inequities by establishing a financial threshold for aid. European
governments have resisted the idea of a threshold, agreeing only
to very minor reductions in subsidies for the biggest farms. In
the meantime, the safety net stretches far and wide. One grateful
recipient is Heiligenkreuz, an ancient Cistercian order in Austria
better known for Gregorian chants and an unlikely hit album, ''Music
for the Soul.''
Last year, the monks struck a half-million-dollar deal with Universal
Music. Then they struck gold again by collecting $822,000 in farm
subsidies for their 44,000 acres, where they employ local farmers
to cultivate crops.
''I think this is just a question of justice,'' said Father Karl
Wallner, dean of the monastery's faculty. ''The land that is owned
by a monastery is being given the same support as everybody else.''
It may not be what European leaders envisaged when they set out
to feed the Continent almost five decades ago, but Father Wallner
calls it ''an act of providence.''
