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MENAFN - AFP - 21/11/2012

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(MENAFN - AFP) As the EU braces for bruising budget talks, the bloc's three small Baltic states have stepped up their campaign to get what they say is their fair share of farm aid.

After chugging across Europe to Brussels, a Soviet-era tractor is being used to press their concerns by arriving to join up with Baltic protestors outside the bloc's headquarters at the start of a crunch budget summit Thursday.

"I have 60 cows and I also grow cereal. I get around 30,000 euros a year in support, which represents around a third of my income, and that plays a role on the profitability of my holding," Bronius Markauskas, one of the protest organisers, told AFP in Kedainiai, central Lithuania.

"I've cut back the amount of soya and rape-seed I use, so that my milk is cheaper to produce. But I'm not developing my holding at all. There's no question of buying new animals. The future's far from clear."

As the economic crisis turns the focus on a drive to rein in EU spending, this week's talks threaten to turn into an ugly fight between older, wealthier members of the 27-nation bloc and poorer states on its southern and eastern fringe.

With a combined population of 6.3 million people, Lithuania, Latvia and Estonia are among the smallest members of the EU.

The trio were part of the EU's 2004 big-bang expansion behind the former Iron Curtain, when the bloc's membership nearly doubled from 15.

They are net beneficiaries of the EU budget, counting on European "cohesion funding", or aid to help poorer members catch up with the more advanced member states and thereby smooth differences across the bloc's single market.

Like other ex-communist states, they are pledging to defend that support to the hilt.

They argue that they should not have to bear the burden of cuts, given that they have been locked in among the EU's toughest austerity drives since the crisis struck.

The issue of farm aid is their other major bone of contention, stretching back to the pre-crisis era, as the Baltic trio demand a level playing field under the Common Agricultural Policy (CAP).

The CAP is a system of EU subsidies to farmers, but east European nations complain that west Europeans, notably in countries such as France, get an unfair share.

"It is one of our priorities to ensure fair distribution of payments in the EU-27," Latvian Prime Minister Valdis Dombrovskis told AFP as he watched the tractor leave his country's capital Riga.

"It's not possible to compete in the EU internal market if some countries receive subsidies that are several times larger than the level of support for Baltic farmers."

Latvian Foreign Minister Edgars Rinkevics upped the ante on Tuesday by saying that protecting cohesion funding and a fair go for Baltic farmers were "red lines" for this country.

On average, European farmers receive 296 euros per hectare from CAP coffers.

Currently, Lithuania's farmers receive 119 euros, set to hit 144 euros in 2014 under current spending plans.

In Estonia, meanwhile, the sector is similarly disgruntled.

"Even with a planned increase -- 40 extra euros by 2017, which will raise our aid from the current 117 euros to 156 euros per hectare -- support for Estonian farmers will remain among the lowest in the EU," said Aivar Kokk, deputy head of the Estonian parliament's rural affairs committee.

CAP aid was long based on production, as the original goal when it was launched in the 1950s was to provide a buffer against the kind of food shortage seen in post-war Europe.

After that caused the legendary "mountains" of grain or butter, for example, Brussels has tried to add an environmental protection edge to the CAP.

Production still remains a factor, however, and the Baltic states have spent two decades trying to undo the impact of low output by the collective farms that were the norm during their five decades as Soviet republics.

In addition, their small domestic markets are less than competitive, and their farm sectors have struggled, with smaller operations going under.

In Lithuania, the farm sector accounted for 11.3 percent of total employment in 2011, and 16.5 percent of exports.


 






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