Farm Ireland

Saturday 16 December 2017

Omens are not good for the CAP budget

This is a critical week for the Irish farm sector. The Commission's proposals on the overall EU budget for the period to 2020 are due to be announced in Brussels tomorrow evening. This will effectively set the parameters for EU farm spending up to the end of the decade.

While developments in Greece will certainly take centre stage and hog most of the news coverage, tomorrow's announcement will be hugely important for Irish farmers.

The omens are not good. Both the total EU budget and CAP's share of the overall spend are under pressure.

The French, British and German leaders -- Nicolas Sarkozy, David Cameron and Angela Merkel -- have called for a freeze in the overall EU budget.

In addition, Commission president Manuel Barroso has indicated he wants to shift the emphasis of the EU budget away from agriculture and structural funds.

The total EU budget currently comes to around €140bn, with CAP accounting for close to 40pc of this spend -- or roughly €56bn.

Given the ongoing financial crisis within the EU -- and the poor growth prospects for the immediate future -- securing the same level of funding for farming is going to be a real challenge.

As one Brussels source put it: "You wouldn't have to be a rocket scientist to realise that there is enormous pressure on the CAP budget."

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Suggestions by Mr Barroso recently that the CAP's Pillar II could be scrapped or significantly reduced illustrate the thinking in some Commission quarters.

Agriculture Commissioner Dacian Ciolos rejected this suggestion last week in the EU Parliament. He said the rural development element of CAP was "absolutely vital" and "complimented" Pillar I.

However, Mr Barroso's comments are indicative of the battle Commissioner Ciolos faces in protecting CAP. That the horse trading at Commission level will be a test for Commissioner Ciolos goes without saying.

Ironically, one of the areas which could take funding from CAP is research and innovation, which comes under the bailiwick of Ireland's commissioner Máire Geoghegan-Quinn.

It has been suggested that a clever approach by Commissioner Ciolos would be to seek that a share of any increased research budget should be ring-fenced for agriculture.

It is also worth keeping in mind that the Commission proposals are just that -- it is merely the Commission's view, and it has to be agreed by the heads of government and by the finance ministers of member states.

That means that the final agreement on the EU budget and farm spending could be very different from tomorrow's proposals.

Indo Farming