Business Farming

Wednesday 17 September 2014

Leaders fail to make EU CAP budget deal

Published 28/11/2012 | 06:00

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Stalemate piles pressure on Irish presidency starting in five weeks

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The EU's CAP 2014-2020 budget remains in limbo this week as Government leaders failed yet again to reach a deal in Brussels.

Despite proposals to slash €17bn off the CAP budget over seven years, the EU's biggest net contributor states, Britain and Germany, were still not satisfied that the spending cuts went far enough.

It remains to be seen if the process can be put back on track during tomorrow's meeting of farm ministers in Brussels, but it now looks highly unlikely that another high-level meeting to hammer out a budget will take place before January.

The stalemate has heaped pressure on the six-month Irish presidency which starts in five weeks.

Observers insist that it will still be possible for Europe's leaders to strike deals on both the budget and CAP reform before the end of the Irish presidency in June, but the practicalities of implementing all the systems required by the reforms by 2014 is beginning to look doubtful.

payments

Direct payments were saved from the worst of the cuts in the last proposal that was tabled by the EU Council President, Herman van Rompuy.

Instead, €35m was ear-marked to be cut from Ireland's Pillar II payments that contribute approximately €400m a year to schemes here such as Leader, Disadvantaged Area and environmental schemes.

When inflation is included, this would result in a 20pc decrease, or nearly €500m being cut from Ireland's rural development budget over the next seven year period.

In addition, Mr van Rompuy's proposals included an option for each member state to move up to 15pc of funding between pillars.

This could be a very attractive option for cash-strapped Governments since rural development's Pillar II requires matching funding from national exchequers.

Mr van Rompuy had originally proposed a cut of over €8bn for the Single Farm Payment element of the CAP budget.

innovation

However, this proposal was reversed before discussions broke up on Friday, with the latest EU development initiatives such as innovation taking the bigger brunt of the €80bn in total savings.

"The more recently established funding pots are the ones that are most vulnerable to cuts," remarked one source that was present for the negotiations.

Reacting to the breakdown of the talks in Brussels, both the IFA and CONTINUED ON PAGE 3

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the ICSA said farmers would be disappointed. "It represents a significant setback to achieving the right CAP deal for Ireland," said ICSA president Gabriel Gilmartin.

"However, it is important that our leaders didn't agree to unsuitable budget measures just for the sake of reaching agreement."

ICMSA president, John Comer, said that it was imperative that the Irish Government used the deadlock as a window of opportunity to co-ordinate a defence of the CAP budget and the €500m in cuts to Ireland's CAP allocation that was currently on the negotiating table.

Environmental groups have warned that targeting environmental schemes for cuts could have disastrous effects on wildlife.Conservation groups claim several species of bird could become extinct within a decade if funding for environmental schemes in CAP is cut.

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