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Wednesday 21 November 2018

Farmers face cuts of up to 30pc in farm payments as EU considers its budget

  • Scenario could see average farm income drop by more than 10pc
  • IFA describes it as 'unbelievable' the Commission would even consider such an option
Photo: Reuters
Photo: Reuters
German EU Commissioner for budget and human resources Gunther Oettinger
Ciaran Moran

Ciaran Moran

Farmers across Europe are facing a significant income drop, as a possible 30pc cut to the European Common Agriculture (CAP) budget was proposed today.

The European Commission is seeking spending cuts and new sources of revenue to cover the hole left by Britain’s exit from the bloc, saying EU money should be conditional on members observing the rule of law.

The Commission prepared the options for a discussion among EU leaders on February 23.

It will present its final proposal for the next long-term budget for a seven year period from 2021 to 2027 in early May.

“It (the budget) is ... vital at a time when Europe is in the midst of a fundamental debate on how the Union should evolve in the years to come,” the Commission said in a statement.

“We now have an opportunity to choose the Europe we want and to decide on a budget that helps us build it,” it said.

The Commission set out three options for future funding of the Commin Agricultural Policy.

One option was to maintaining expenditure levels of around €400 billion over the period for the Common Agricultural Policy, corresponding to approximately 37pc EU’s total budget.

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A reduction of support for the Common Agricultural Policy by 30pc was also proposed and would represent a cut of around €120 billion over the period of the next budget, or approximately 11pc of the total fund.

The Commission has admitted that this scenario could see average farm income drop by more than 10pc in a number of Member States and potentially more pronounced income drops in specific sectors.

A further proposal by the Commission was a reduction of support for the Common Agricultural Policy by 15pc would represent around €60 billion cut over the next seven years.

In this scenario, the Commission says a reduction of average farm incomes would be more limited but could still have a noticeable impact in certain sectors depending on the choices made.

IFA President Joe Healy said the Taoiseach Leo Varadkar and Agriculture Commissioner Hogan are facing a big test in their talks with President Juncker between now and the setting of the CAP Budget in early May.

“Under no circumstances can Ireland contemplate any of the options set out in an EU Commission budget document published today as they would shut down agriculture and rural Ireland.”

Healy said it was unbelievable that the Commission would even consider such options.

“This is a clear attempt to ‘soften up’ the European agri sector for a cut in the CAP budget and it is totally unacceptable and it won’t work,” he said.

"Ireland cannot a contemplate anything other than an increase in the CAP Budget. IFA has make a strong case for each Member State to increase its contribution to the EU Budget.

“This proposal has already been accepted by a number of Member States and we expect the Irish Government to step up with a similar commitment."

IFA is proposing contributions to the EU budget from Member States must increase from 1 to 1.2% of Gross National Income, to reflect the impact of Brexit on the one hand, and the improved EU economic conditions on the other.

“Since 1990 the percentage of overall EU budget that is going to the CAP has fallen from 70% to 38%. To contemplate any further cut would be a disaster for agriculture and rural Ireland,” he said.


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