European Union

Saudi billionaire was paid hundreds of thousands of dollars in EU farming subsidies

Justina Crabtree; special to
Walter Zerla | Cultura | Getty Images

Billionaire Saudi Arabian Prince Khalid Abdullah al Saud's Juddmonte Farms, an international racehorse breeding business, received more than £400,000 ($519,536) in European Union farming subsidies last year.

The news reveals how al Saud, who has an estimated worth of some $1 billion according to Bloomberg, and other multi-millionaires are benefiting from a system designed to support Europe's poorer farmers.

An article published by Greenpeace Thursday claimed that Juddmonte was owned through an offshore holding company in Guernsey, with reported a turnover of £53.4 million in 2015. But, only £1.5 million of this came from farming. Its thoroughbred stud farm and horse racing businesses provided the rest.

Juddmonte is yet to respond to CNBC's request for comment.

Greenpeace also said that whilst the U.K. company reported profits of £8.7 million in 2015, it "paid no corporation tax, due to trading losses in the past years."

U.K.'s Department for Environment, Food and Rural Affairs' (DEFRA) Common Agricultural Policy (CAP) payment database revealed that Juddmonte Farms received a total of £406,825.63 in the financial year of 2015, and £516,768.04 in 2014.

Greenpeace's report said that at least 16 of the 100 establishments which received the largest EU farming subsidies were associated with people on the Sunday Times Rich List. This did not account for wealthy owners from outside the U.K., such as al Saud.

The news comes as the British government is to undertake its Brexit negotiations, which would have to realign how farming subsidies, which are currently paid out by the EU, are allocated.

According to DEFRA, a total of €3.2 billion for direct payments and €750 million for rural development was received from the EU last year.

Speaking to the Financial Times in 2011, Lord Teddy Grimthorpe, racing manager at Juddmonte, said that the farm is "not run as a commercial operation." He added that, "the prince ends up putting money into the business rather than taking it out."

The EU's direct payment system allocates landowners subsidies based on the size of the land they own.

Hannah Martin of Greenpeace U.K.'s Brexit response team said in a statement sent to CNBC via e-mail that: "It is untenable for the Government to justify keeping a farming policy which allows a billionaire to breed race horses on land subsidized by taxpayers. … We cannot continue with a broken system which sends public subsidies into billionaires' bank accounts. The British Government has never had a better opportunity to reshape our farming sector for the common good."

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