Farm Ireland

Saturday 20 January 2018

EU wants to reduce farmers’ subsidies to create crisis fund

Ciaran Moran

Ciaran Moran

The European Commission has adopted a proposal to reduce spending on support for farmers next year (2018) in order to create a crisis reserve that can be used should the need arise.

The so-called financial discipline proposal is made each year and reduces spending under the common agricultural policy – specifically direct payments that are funded by the European Agricultural Guarantee Fund (EAGF) – in order to set aside €400m (in 2011 prices) to cover potential crises in agricultural markets.

The proposal for 2018 aims to reduce CAP direct payments in excess of €2 000 by 1.388149%, with the exception of direct payments for farmers in Croatia as they are still being phased into the scheme following their country's accession to the EU.

The money saved as a result will be used to ensure that a crisis reserve of €459.5 million (in current prices) is available in the 2018 budget. 

The rate is slightly higher than the 1.3% applied in 2017 (for a reserve of €450.5 million).

According to EU budget rules, the Commission is obliged to table a proposal on financial discipline before the end of March each year.

The Council and European Parliament now have until June 30 to fix the rate of financial discipline.

In the absence of an agreement by June 30, the Commission will set the rate.

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