AGRICULTURAL SUBSIDIES and quotas are the kernel of some of the toughest talks Slovakia and the European Union are likely to hold in the run-up to Slovakia's expected entry to the EU in 2004.
The outcome of the talks will determine the future of Slovak farming, as they will set quotas, or supply caps, on how much of different types of goods the country can produce. They will also set the amount of subsidies Slovak farmers will get in competing with their heavily subsidised EU counterparts.
"There's a lot of money involved," said Onno Simons, counsellor with the European Commission (EC) delegation in Slovakia.
Slovakia's agriculture 'chapter', one of 30 legislative packages that aspiring EU members must include in their domestic bodies of law before entry, was opened in June 2001. Negotiations are now entering the final stages, with the setting of subsidy levels expected to come last.
The chapter is one of four that Slovakia has yet to close, and doubt remains over whether the country along with nine other top EU candidates will have enough time to close it before the year's end, when all negotiations are set to be finalised.
The main problem is the subsidies, or direct payments to farmers, that the EU makes through its Common Agriculture Policy (CAP). These subsidies eat up about half the EU's annual budget, or about 40 billion euros.
The EU proposed this spring that new members upon entry would receive only 25 per cent of the agriculture payments provided to current member states, a figure that would be increased to 100 per cent over 10 years.
The proposal drew severe criticism from candidate countries including Slovakia and was withdrawn at the end of June. With the Union expected to adopt a final position on direct payments in early November, EU candidates will have only a few weeks to close talks before the December Copenhagen summit, when the current Danish EU presidency wants to make early entry decisions.
Because Germany is the largest contributor to the EU budget, and given the amount of funds the EU puts into agriculture, some observers think that the result of the dispute between member and candidate countries over subsidies is in part dependant on the results of September elections in Germany.
Expressing his discontent with the original EU proposal, Ľubomír Miček, director of the Agriculture Ministry's European integration section, asked The Slovak Spectator on July 9: "If a farmer in neighbouring Austria receives a 100 per cent subsidy and a Slovak farmer only 25 per cent, how is our farmer supposed to be competitive, when in a year and a half the production costs will be approximately the same for both?"
While subsidies are to some extent a matter out of Slovakia's hands, Miček said that production quotas on certain Slovak commodities were "an absolute priority for which we are ready to fight to the last minute."
Other Slovak agriculture experts said that in capping Slovak production at levels that don't reflect current domestic demand, the EU could turn Slovakia into a net agriculture importer.
"With [the proposed caps on] some commodities, we won't reach even 70 per cent of domestic consumption, meaning that we'll have to import large amounts of food," said Ivan Jung, director of the European integration division at the Slovenská poľnohospodárska a potravinárska komora (Slovak Agriculture and Food Chamber) on July 8.
Jung added that quotas were not simply a matter of production, but affected employment, soil use and the preservation of rural land as well.
The quotas proposed by the EU have been calculated based upon average production in Slovakia for various goods from 1995-1999, a reference period which Miček said exhibited the weakest agricultural output in the country's history.
Milk is at top of the quota list. Although Slovakia experienced a sharp decrease in milk production and consumption following the fall of communism in 1989, Miček said he expected the numbers to rise again soon.
Simons, on the other hand, argued that Slovakia, just like other candidates, naturally wanted the quotas to be based on the sometimes far higher production levels recorded during socialism.
Another item high on the agenda is isoglucosis, a liquid sweetener used for making sweetened beverages. Miček argued that the only Slovak factory which produces isoglucosis did not resume operation until 1998, producing around 3,000 tons that year, increasing to about 5,000 tons the following year.
The factory, however, has the capacity to produce around 92,000 tons annually. Miček therefore argued that the EU should not have taken the firm's initial production figures as a reference point to calculate Slovakia's isoglucosis quota.
While the quota is set at around 4,000 tons of isoglucosis, Slovak domestic demand for the good is 5,000 tons.
But the EC's Simons insisted that all candidate countries had to start thinking like EU members.
"The matter must be considered within the context of the EU. If we have overproduction of milk in the EU, then it wouldn't make sense to add even more milk potential through a high quota in Slovakia. The same goes for other products," Simons said.
