Farm Ireland
Independent.ie

Thursday 23 March 2017

Brussels briefing: Uncertainty over UK's exit could affect farming budgets

Sarah Collins

European Agriculture Commissioner Phil Hogan.
European Agriculture Commissioner Phil Hogan.

Brussels was firm in the grip of Brexit-mania this week, as the implications of the UK referendum result sank in.

European Commissioner for Agriculture Phil Hogan spoke to this newspaper about the implications of the British vote on EU agriculture policy.

One of the first problems is the "uncertainty" caused by the British failure to trigger the exit clause under Article 50 of the EU treaty, which will feed into talks on the bloc's new long-term budget, known as the multi-annual financial framework (or MFF in EU-speak).

"We are waiting for the UK government to decide when they will trigger the Article 50 mechanism to allow negotiations to commence with the EU, and there is no sign of it happening soon," Mr Hogan said.

"I expect that the European Union will be seeking early indications of the intentions of the new [UK] government to get the negotiations underway, and this will feed into the financial framework that will be discussed and negotiated post-2020," Mr Hogan told the Farming Independent in Bratislava last week.

Uncertainty

Despite uncertainty over long-term spending, last week the European Commission proposed a draft EU budget for 2017 worth €134.9bn, with €42.9bn going to farmers.

Annual EU budgets are constrained by the spending limits set out every seven years in the MFF.


The real test of what effect the UK referendum has had on the budget, and on its negotiating stance in the EU, will come next year when the EU begins a mid-term review of the 2014-2020 budget.

The outcome of those talks will also shape the money available after 2020.

"There will be discussions, in the context of the financial framework for 2020, about the future role of agriculture, how agriculture will contribute towards implementing our international agreements on climate change and the sustainable development goals, and how we can develop new market- orientated tools around dealing with volatility in commodity prices and how it affects the farmer," Mr Hogan said.

Although the UK has never been a supporter of increasing funding for farmers under the Common Agricultural Policy (CAP), its net EU budget contribution was the third-largest in 2014, after Germany and France.

Deals

The 2020-26 budget could be the first without a UK contribution since 1973, depending on what kind of exit and trade deals are negotiated with the British government.

Ireland will have to get like-minded EU countries such as France, Spain and Italy on board to push for a well-funded agricultural budget after 2020.

France has already set out its thoughts on the future of the CAP, following a Dutch paper last month.

'We need alliance with northern Europe'

On the dairy market crisis, it will be much more important for Ireland to cement alliances with northern European countries, the Agriculture Commissioner said.

"At the moment there is market volatility, particularly in the dairy sector, and Ireland is working closely with the Netherlands and Denmark in relation to how to resolve some of those market issues," Phil Hogan said.

He is fresh from announcing a third emergency package for dairy farmers, which he said could include new financial assistance.

However, given EU budget constraints, any money for farmers will be competing with money the EU will need to set aside to deal with the refugee crisis.

"It would be an EU-wide response which would include the acceleration of financial assistance," Mr Hogan said of the new dairy market measures.

"But I have to have discussions with the budget commissioner about these matters, and whatever assistance we get will have conditions attached to ensure that we stabilise milk production and bring about the necessary balance in the demand and supplies in that particular commodity, in order to help increase prices to farmers in 2017," Mr Hogan said.

Denmark and the Netherlands will be a key support for Ireland, as both are in favour of seeking increases in dairy production, while France is leading a bloc of countries that is looking for EU controls on production, in order to stabilise milk prices.

France has stated there are around 15 countries that support the position, including Italy and Spain.

Mr Hogan said the EU would be concentrating on assisting smaller milk producers to compensate them for the "major loss of income they have suffered since this crisis began two years ago".

There have been several emergency measures put in place for the dairy sector since last year, including the lion's share of last September's €500m financial package, and a more than tripling (from 109,000 to 350,000 tonnes) of the limit for public intervention to shore up skimmed milk powder prices.

Legislation tabled to resolve turf wars

New legislation is being drafted to de-designate some of the bogs at the centre of the long-running turf-cutting controversy.

After pressure from a number of TDs, a deadline of 100 days for moving to de-designate 46 National Heritage Areas (NHAs) was written into the Programme for Government.

Independent TD Michael Fitzmaurice welcomed the move towards resolving the turf controversy.

"Bear in mind this is just one piece of a jigsaw in solving the issues, there is a few also to take the place of the 35 NHAs that are still designated. We are still working on trying to resolve the Special Areas of Conservation problem," he said.

Arts Minister Heather Humphreys said a bill would be drafted to de-designate 39 raised bogs and partly de-designate seven raised bogs. It will be brought before the Oireachtas Rural Affairs committee for scrutiny. Ms Humphreys said it would result in the phasing out of turf cutting on certain existing NHAs by January 1, 2017 in addition to the partial or complete de-designation of certain NHAs.

"There will be around 2,500 fewer actively cut turf plots in the reconfigured network. This legislation is an important step forward in terms of securing a long-term resolution for turf cutters," she said. "It is my hope that de-designating these bogs will help with the relocation process, which is an important piece of the overall resolution for turf cutters."

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