EU Wields $460 Billion of Aid to Enlist Farmers in Climate Fight

European Union farmers risk losing access to billions of euros in subsidies unless they adapt their production methods to much stricter environmental standards, under a preliminary accord reached by the bloc’s governments in the wee hours of Wednesday.

Under the deal reached by agriculture ministers meeting in Luxembourg, any farmers considered to be undermining EU climate goals would be ineligible for aid and 20% of direct payments will be reserved for organic farming and other climate-friendly practices, such as sequestering carbon in soil.

“Farmers would receive financial support under the condition that they adopt practices beneficial for the climate and the environment,” the EU said in a statement. “All farmers would be bound to higher environmental standards; even the smaller ones.”

German Agriculture Minister Julia Kloeckner called the agreement “a milestone for Europe’s agricultural policy” after the marathon meeting which paves the way for negotiations with the European Parliament before the final terms go into effect next year.

The EU is aiming to bring the agricultural sector into the “Green Deal” which aims to eliminate net-carbon emissions by 2050. Member states are due to decide in December whether to adopt a more ambitious interim target of cutting discharges by 55% from 1990 levels by 2030.

The plan will mean sweeping regulatory changes for every part of the European economy from transport to construction and a torrent of legislative initiatives is expected over the next few months, including stricter emissions caps for cars and tighter energy efficiency standards for buildings.

EU farmers will receive some 390 billion euros ($460 billion) in subsidies over the next seven years, by far the biggest chunk of the bloc’s jointly-financed budget. Of that, 291 billion euros will be distributed in the form of regular direct payments.

©2020 Bloomberg L.P.

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