141 agreement

Finland and the European Union Commission have reached an agreement on the so-called 141 agricultural subsidies. The news was reasonably good for Finnish taxpayers:

Next year, nearly 94 million euros will be granted to farmers in southern Finland. By 2013, support will be just 62.9 million euros.

However, Less Favoured Area (LFA) subsidies will help compensate for the cuts.

During the first four years of the national subsidies, funds will decrease on average by 2.7 percent annually. In the final two years, support will be cut more drastically.

The Central Union of Agricultural Producers and Forest Owners (MTK) said it is very disappointed by the decision to cut subsidies. The union said pig and poultry farmers will be the most affected by the loss of support.

As expected, the EU Commission didn't buy the rather unconvincing argument that the 141 subsidies were meant to permanent. I wonder if it will still be dragged out of storage in 2013.

The LFA subsidies - wouldn't "More Favored Area" be a more accurate name? - are an interesting addition, but it seems that they won't cover the drop in the 141 subsidies. The 141 cuts will amount to about 30 million euros after six years. According to Alexander Stubb MEP (fi), the LFA subsidies will cover about 15-20 million euros of that.

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