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Sunday 17 December 2017

Farmers facing a Brexit ‘double whammy’ - ICSA

Making up the shortfall in CAP budget must be priority for Irish negotiators

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Claire Mc Cormack

Claire Mc Cormack

Irish farmers will suffer a double whammy as a result of Brexit because there is no plan to make up the shortfall in the UK contribution to the EU budget, the ICSA has warned.

ICSA president Patrick Kent said Irish farmers were already paying a price for Brexit in the form of exchange rate volatility. He said farmers would not accept the added financial burden of reduced CAP payments. 

It is estimated that current CAP funding of €58 billion could suffer a 7-9pc reduction, or a fall of €4-5 billion, as a result of Brexit.

However, Mr Kent insisted the CAP budget could not be cut as a result of the UK leaving the EU.

“We believe that making up the shortfall [in CAP funding] must be a priority and that each of the EU-27, including Ireland, will have to bite the bullet,” he said.

Speaking in Brussels last week, where ICSA was engaged in a series of lobbying meetings, Mr Kent called for increased Government efforts to protect CAP funding.

“It is unacceptable that Ireland pays the price for Brexit and we need the EU to understand this. While the EU focus is on ensuring that the UK cannot be seen to have a Brexit without adverse consequences, it is even more untenable that member states who remain in the EU would be the losers,” Mr Kent said.

ICSA pointed out that the value of the EU budget has been undermined in real terms by European Central Bank’s

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policy of quantitative easing (printing money) which has pushed up the price of inputs such as chemicals, fertilisers and diesel.

The annual UK net contribution to the EU budget is not a straightforward calculation. While the 2015 UK contribution has been estimated at €13.5 billion (net of the UK rebate), the more typical net annual contribution has been around €10-11 billion.

This would suggest that the net reduction in the CAP post Brexit could be in the range €4-5 billion, implying a 7-9pc reduction in CAP payments.

The current €58 billion CAP budget delivers €1.5 billion in direct payments to Ireland’s farmers.

Irish MEP Marian Harkin pointed out that while the overall cut to the last EU Budget was 10pc, the reduction to the single farm payment (SFP) was just 3pc.

Ms Harkin described this concession to the agriculture sector as a “recognition of its role in maintaining food security, protecting the environment and ensuring the sustainability of rural areas”. 

“At the time, it was said that the then Agri Commissioner, Ciolos, escaped with his budget and his life on the condition that 30pc of the budget was for Greening,” Ms Harkin said.

Pressure

However, she accepted that there will be exceptional pressure on the next EU budget due to the withdrawal of the UK contribution, with serious doubts that it will be compensated by agreement between the remaining member states to up their contributions. 

“The fact that the European Parliament’s president Antonio Tajani recently had to refute a media report that he favoured shifting funding from agriculture to other policies is worrying,” she admitted. 

EU Budget Commissioner Gunther Oettinger’s statement to representatives of COPA that a hit of €10 to €13 billion could be expected to the overall EU budget post Brexit added to farmers’ concerns. 

This would require raising member state contributions from 1pc to 1.1pc to sustain present budget levels, the Budget Commissioner said. 

He also stressed the need for funding migration issues, border protection and the fight against terrorism.

The Brexit negotiations could mean that key discussions on the budget will be pushed back until autumn 2018, Ms Harkin predicted.

“In my view food security for Europe is as relevant as ever and needs to be emphasised in advocating for maintaining the agriculture budget,” she said.

“However, equally important is to understand how vital environmental issues are going to be.

“An indication of this was seen in the EU parliament last week when members voted to sustain a Commission proposal to ban the use of pesticides in Ecological Focus Areas,” the Irish MEP said.

“If we are to successfully lobby to maintain the CAP budget, next time out, it will be essential to show that CAP

has delivered on environmental and biodiversity issues as well as on food security,” she maintained.

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