The new system works by paying landowners a fee - or single farm payment - for farming the land in any manner they choose. It's a way of boosting rural incomes without overproducing food.
In Britain, for example, it may encourage farmers to grow organic wheat and barley. In Spain, the subsidies have been funnelled into the breeding of fighting bulls.
On average, each fighting bull breeder receives about ?185 per animal per year. In effect, the farmer receives EU subsidies for four to five years for each animal while they are being reared to fighting age.
Given the 40,000 bulls die in Spanish bullfights every year, the total EU support package for bullfighting has so far amounted to more than ?100million.
But that is only part of the story. The EU also helps build and renovate Spanish bullrings. In the towns of Haro in the province of Rioja and Toro in Zamora, the EU is so proud of its support it has even erected huge signs outside the bullrings highlighting its contribution.
Campaigners believe this is just the tip of an iceberg. They are concerned that a significant proportion of the EU's agricultural support package allocated to Spain - currently ?5.6billion per year - is siphoned off to support bullfighting and 'blood fiestas' - where a variety of animals, including chickens and cows, are also slaughtered in local rituals.
Bullfighter David Fandila 'El Fandi'
Barbaric: Bullfighter David Fandila 'El Fandi' drives 'banderillas' into a bull at the San Fermin festival yesterday
Another source of funds is the EU's rural development programme. Almost ?600million is given to Spain to spend as it sees fit. This filters down to towns and villages where mayors and dignitaries can boost their popularity by renovating bullrings and laying on the blood fiestas.
'The organisers of bullfights in Spain have told me that they love the EU because they now receive enough subsidies to kill 15 or 16 animals in a fiesta rather than the traditional one or two,' says Tony Moore, veteran campaigner for the welfare group Fight Against Animal Cruelty in Europe.
'The EU is supporting the torturing to death of bulls in the bullring and countless other animals in village 'blood fiestas'. I find it absolutely disgusting that a proportion of my tax goes to support animal abuse.
'It makes a mockery of the EU's own animal welfare laws and it has to stop.'
Perhaps the EU's financial support for bullfighting is not surprising. The Portuguese President of the European Commission Jose Manuel Barroso is a keen supporter. He overturned Portugal's 76-year-old ban on 'death bullfighting' when he was the country's prime minister. And French President Nicolas Sarkozy is known to support the bloodsport.
For its part, the European Commission claims it is powerless to stop its money being used to support bullfighting. 'It's not our wish or intention for our money to go anywhere near bullfighting,' says the European Commission's spokesman for Agriculture and Rural Development.
'We do not condone the use of EU money to support bullfighting, but we cannot stop it. It is outside our legal competence to do so.'
The day after I watched Santanero die, I was taken by the European Anti-Bullfighting Committee to visit the farm where he was reared.
The Cortijo Wellington farm, which lies just outside Madrid, receives more than ?120,000 per year in EU subsidies to breed fighting bulls for the ring. Still, for farmer Domingo Gonzales, the money 'is not enough'.
'Fighting bulls are expensive to rear,' he says. 'People do not understand how much it costs to produce the country's finest fighting bulls. I'm proud of them.'
A quick glance across his 1,700 acre farm with 700 bulls begs the question, why are they so expensive to rear? The bulls are largely left to fend for themselves in lush pastures.
The farm buildings are decrepit. The handful of Moroccan workers sleep in rough outbuildings attached to the farmer's delightful finca-style farmhouse. It seems the only expensive item is his luxury pick-up truck.
Mr Gonzales sees himself as a philanthropist as well as a businessman. He sells - or occasionally donates - 'baby bulls' to local fiestas.
'I rear two-year-old bulls for the children in the local villages,' he says. 'In a few weeks there will be a special festival for the children. They will play and fight with the bulls. They chase them through the streets and pull their tails and ears. They finish by stabbing them with little swords and knives. Children like doing that.'
Might that not be cruel, I asked? He glared at me. 'Animals do not feel pain,' he said. 'Fighting is what they are for. If we didn't breed and fight them, they would not exist.'
Sadly, such blood fiestas are common throughout Spain - far more frequent than bullfights - and involve the cruel deaths of hundreds of thousands of animals.
A favourite fiesta 'sport' involves hanging chickens upside down by their feet on washing lines. The townsfolk then ride underneath and pull their heads off to win prizes.
Another involves placing chickens in boxes with their heads poking out of the top. Local men and boys then try and chop as many heads off as possible while blindfolded.
Other fiestas involve 'games' in which cows are chased into the sea where they drown. Others are equally barbaric, such as the infamous 'fire-bull' festivals. In these, burning balls of wax and paraffin are attached to a bull's horns and the terrified animal is then chased through the streets. There are at least 10,000 fire-bull fiestas every year in Valencia province alone.
Needless to say, many of the animals burn to death. And virtually all of the animals will have been reared with the help of EU subsidies.
These horrific blood fiestas make bullfights like those I witnessed at Madrid's Las Ventas stadium appear relatively civilised. But even here appearances can be deceptive. Bulls are doctored to weaken them before they get anywhere near the ring.
A common tactic is to force-feed them 3lb of Epsom salts to induce diarrhoea and dehydration. The animals are then forced to eat salt to cause muscle spasms and cramps once they enter the bullring.
Another trick is to shave off the top three or four inches of the bull's horns. This ensures that he cannot inflict any significant injuries on a matador but, more importantly, it alters his sense of space and balance.
To make the fight even more uneven, the bulls are often drugged to slow down their reactions.
And if all that wasn't enough, men on horseback puncture the bull's lungs with spears as soon as he enters the ring. As well as causing immense pain, it ensures that the bull's lungs fill with blood and start suffocating him. Matadors are rarely, if ever, put at risk.
The barbarity of bullfighting is beyond question and the Spanish are gradually beginning to shun it. Recent opinion polls indicate that only about a quarter of Spaniards are interested in bullfighting, with only eight per cent actively attending fights.
Bullfighting also seems to be a generational issue, with older people supporting it and younger people opposing it. This is mirrored in the attendance at the fights.
At the Las Ventas bullfight I attended - the most famous in the country - the crowd was only about 5,000 (the stadium's capacity is about 22,500). Most of the crowd looked over 45. Virtually all the youngsters were tourists, entranced perhaps, by the 'romance' of bullfighting propagated by Ernest Hemingway's tales of pre-revolutionary Spain.
So perhaps the little girl who screamed at the matador to spare the bull represents the future. For the sake of the bulls of Spain - and the country's reputation and honour - let us hope so.
Meanwhile, you and I need to remember that, through the EU, we are subsidising this so-called 'sport'.