Farmers braced for cuts after EU lops s650m off CAP funding

Declan O'Brien

Declan O'Brien

Irish farmers stand to lose €651m in direct payments from Brussels over the next seven years as a result of last week's EU budget agreement.

The country's 'national envelope' for annual CAP funding has been cut by €93m or almost 6pc, falling from €1.625bn to €1.532bn.

A package of measures agreed by the EU heads of state last Friday will slash €65bn off the overall cost of running the union. The budget must now go to the European Parliament for final approval. Under the new EU budget – or Multiannual Financial Framework (MFF) – overall spending by Brussels will be limited to €960bn annually.

The requirement for savings has resulted in cuts to the overall CAP budget and in the level of transfers to member states, particularly the more highly developed counties.

The overall reduction of €93m in Ireland's national CAP envelope will result in significant cuts to direct payments for the country's 120,000 farmers. The allocation for the single farm payment (SFP), which is delivered under Pillar I of CAP, has been cut by 4pc or close to €54m. For a farmer with a SFP of €15,000 this will mean a loss of around €525 annually.

The cut in Ireland's Pillar II allocation is even more severe. This has fallen from €352m to €313m, a reduction of €39m or 11pc. This Pillar II figure includes a new special allocation of €100m, or almost €14m/year, which will be targeted at the Border, Midland and West (BMW) region.

Pillar II funding is directed at agri-environment measures such as AEOS, as well as the Disadvantaged Area Scheme, LEADER and other rural development initiatives.

The Minister for Agriculture, Simon Coveney, defended Ireland's budget allocation, pointing out that it guaranteed CAP funding of over €1.5bn per year for farmers.

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He said the new EU budget also provided clarity on EU agriculture funding needed to allow completion of the negotiations on CAP reforms.

"I am very pleased that we have protected Irish farmers' direct payments. There were substantial threats to this vital transfer to Ireland from those who wished to cut the CAP budget overall by up to 30pc and from the redistribution of these funds between member states," said Mr Coveney.

Describing the 4pc cut to Ireland's SFP funds as "a very small reduction", he said the changes were necessary to accommodate new member states.

Taken together, the EU funding to Ireland from direct payments, rural development and market supports will amount to over €11bn over the seven year period 2014-2020.

In relation to the 'greening' of direct payments, Mr Coveney said the summit had endorsed the direction of the Commission's proposals that 30pc of the SFP allocation would be linked to the new green criteria.

Mr Coveney said that no decision had been made on whether this payment would be made as a flat rate or as a percentage of a farmer's payment.

Last week's summit also reached conclusions on a number of issues that were central to the CAP negotiations including:

nThe co-funding rates for rural development will generally be 53pc but there are suggestions that this figure could be increased to 75pc for agri-environment schemes;

nCapping of direct payments will be introduced on a voluntary basis by member states;

nThe new ecological focus areas will be implemented in a way that does not



take land out of production and avoids unjustified income losses to farmers;

nTransfers of up to 15pc will be allowed between direct payments and rural development or vice versa;

nProvision is made for an agriculture crisis reserve of €2.8bn or €400m annually – funded as required from direct payments.

Mr Coveney and his officials in the Department of Agriculture will now be in a race against time to get an agreement finalised before Ireland relinquishes the EU presidency at the end of June.

Informal negotiations will now start with both the European parliament and member states with a view to agreeing the structure of an agreement by early June at the latest.

"The baton now passes to agriculture and fisheries ministers and to MEPs, to hammer out the details of the reformed agriculture and fisheries policies," Mr Coveney said.

Irish Independent

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