Brexit blues and a major shake up of CAP financing
Britain's exit from the EU will be a long and tortuous process but one certaintyis that it will shake up CAP financing and policy, write Kevin Hanrahan and Trevor Donnellan
Without the UK's budget contribution, the EU will need to redraft its €140bn annual budget, either as a smaller pot, or with bigger contributions from some or all of the remaining member states.
The exit of the UK might mean one voice less calling for the "abolition" of the budget's biggest single cost centre - the CAP. But the shock caused by the exit of the UK from the EU could also in the longer run lead to a fundamental reappraisal by Member States of what they want the EU to do for its citizens, including agriculture's share of the total.
The extent of the expenditure on the CAP was already under question, before Brexit ever became a concern.
Some see the need for the EU to free up resources to tackle major challenges facing the EU, such as border security, counter terrorism measures and a means to deal with the migration crisis.
In addition, there are pressures to ensure that the CAP is better tailored toward green objectives and there are also pressures for further moves towards an equalisation of payments across the member states.
It is not difficult to see an end outcome involving a smaller total EU budget, a smaller CAP budget, and a reapportioning of that budget across the remaining EU member states. For Ireland the combination of these three aspects of changes to the EU budget could ultimately lead to a lower total payout under Pillar I of the CAP and lower direct income support payments per farm.
Leaving aside Pillar I considerations, there could also be concerns for Ireland under Pillar II - the CAP's Rural Development Budget.
While resources for Pillar I funding are derived directly from the common funding pot in Brussels, resources for Pillar II are funded differently in that member states co-fund it from their national exchequer.