Farm Ireland
Independent.ie

Monday 18 June 2018

Pillar II will bear the brunt of CAP cutbacks

GLAS, TAMS and LEADER schemes could face cuts of up to 9pc in this week's reform proposals

(Stock photo)
(Stock photo)

claire fox and sarah collins

Funding cuts to farming schemes such as GLAS and LEADER could be double the level of reductions imposed on the Basic Payment Scheme (BPS), it has emerged.

The EU Agriculture Commissioner, Phil Hogan, has insisted that cuts to the BPS provided under Pillar I of CAP will be limited to around 4pc. However, this move could necessitate a 9pc lowering of Pillar II, which funds rural development.

The revelations come as Commissioner Hogan prepares to announce his full CAP reform proposals on Friday.

An EU source told the Farming Independent that the proposals are likely to contain a "fair amount of constructive ambiguity".

And where the axe finally falls will be tied up in what happens to the wider 2021-27 EU budget, which is unlikely to be agreed before the end of this Commission's term in office in 2019.

A 5pc reduction in the CAP was proposed earlier this month by EU Budget Commissioner Günther Oettinger.

A decrease of this magnitude to the Irish CAP envelope of €1.5bn equates to around €75m.

However, changes to the co-financing rules due to be unveiled in the proposal mean the Department of Finance could help to make up the shortfall from the EU budget with national funding.

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Ireland's CAP payments currently comprise €1.2bn under the BPS and a further €300m in Pillar II funds.

With Commissioner Hogan insisting that the reduction to the BPS will be restricted to 4pc, this means that just €48-50m of the €75m in cuts will be clawed back from Pillar I.

This leaves €25-27m to be taken out of the overall Pillar II budget. This equates to a decrease of between 8pc and 9pc.

The proposed level of cuts to Pillar II, which funds programmes such as LEADER, GLAS, TAMS and the Beef Data and Genomic Programme (BDGP), has provoked anger among those most directly affected.

"It is totally hypocritical on the part of the EU to talk on the one hand of the next CAP regime prioritising environmental protection and climate change mitigation, while at the same time cutting funding for environmental schemes such as GLAS," an INHFA spokesman said.

Supports

The INHFA said the Government must commit to increasing national funding to CAP Pillar II schemes to offset reduced Brussels supports.

This view was backed by MEP Marian Harkin.

She said the level of national co-financing for Pillar II schemes had been progressively reduced from 2009, and this process would have to be reversed in a scenario where direct supports from Brussels were being cut.

Much of the package to be announced by Commissioner Hogan on Friday has been well flagged over the last few weeks.

It is likely to include a limit on direct payments from CAP of €60,000 per applicant - although the effectiveness of this measure has been questioned - and the front-loading of payments. This would ensure increased payments to smaller farmers by paying a higher rate per hectare on the first 10 hectares or so.

Controversially from an Irish perspective, the Commission proposals are also expected to include limiting entitlements for part-time farmers. However, it is unclear how this will be achieved.

Indo Farming