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'Devastating blow': Farm subsidies face cut at critical EU budget meeting

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Vincent Black, a farmer from Cavan, with tractors parked on Merrion Square in Dublin (Brian Lawless/PA)

Vincent Black, a farmer from Cavan, with tractors parked on Merrion Square in Dublin (Brian Lawless/PA)

Vincent Black, a farmer from Cavan, with tractors parked on Merrion Square in Dublin (Brian Lawless/PA)

Farmers have described a proposal to cut the EU budget for farm subsidies as a 'devastating blow'.

EU leaders will debate the proposal which would see the proportion of EU funds spent on the Common Agricultural Policy fall to just 30pc from 36pc and over 70pc in the 1980s.

At a critical budget summit on Thursday, it is also understood that Member States will be granted more flexibility in how CAP funds are used and it will also be proposed that 40pc of the expenditure be dedicated to climate action.

The critical budget meeting comes at a time of huge political uncertainty in Ireland as politicians still come to terms with a historic election result.

An Taoiseach Leo Varadkar is expected to attend the meeting having committed to protecting the CAP budget from further cuts in recent months.

IFA President Tim Cullinan said that the leaked proposal of President of the European Council Charles Michel would be a huge blow for Irish farmers.

He said the Taoiseach must now focus on these EU negotiations and not be distracted by the negotiations to form a new Government,” he said.

“This proposal contains a significant cut in the CAP budget and it would be a devastating blow for Irish farmers and rural Ireland and must be rejected,” he said.

“I made it very clear at the IFA AGM in late January that farmers could not take cuts. They need an increased CAP budget to at least take account of inflation and any additional asks being placed on farmers,” Mr. Cullinan said.

Presenting a so-called ‘negotiating box’ which will form the basis of intense horse-trading between 27 EU national leaders at a summit on Feb. 20, European Council President Charles Michel proposed a budget for 2021-27 of 1.074pc of the EU’s gross national income, or 1.095 trillion euros ($1.2 trillion), of which a quarter is to go towards making the EU neutral in terms of CO2 emissions by 2050.

The departure of Britain from the bloc on Jan. 31 left a gap of more than €10 billion a year in the EU’s funding, since it was a leading contributor to the budget after Germany.

But EU officials said revenue from the plastics tax and money from the augmented carbon trading scheme, which would also incorporate the transport sector, could generate 14 billion to 15 billion euros a year — more than enough to fill the gap.

But the overall budget number is still too high for a group of the biggest net contributors led by Germany, the Netherlands, Austria, Sweden and Denmark. These richer countries don’t want an amount higher than 1.0pc and criticised the 1.07pc figure when it was presented by the Finnish EU presidency last year.

The Dutch-led the charge for rich northern states unwilling to step into the Brexit breach: “A smaller EU ... should have a smaller budget,” Prime Minister Mark Rutte said.

Against that, France’s agriculture minister called it “simply unthinkable” to shave funds off Brussels’ hefty spending on farm subsidies.

Plastics Tax

EU officials are also proposing that revenue should be raised from a plastics tax and money an augmented carbon trading scheme, which would also incorporate the transport sector, could generate 14 billion to 15 billion euros a year — more than enough to fill the Brexit gap.

The tax on plastics would be 0.8 euro per kilogram of non-recycled plastic packaging waste. The carbon money would come from revenue generated by the EU Emissions Trading System (ETS) exceeding the average annual revenue per country generated by allowances auctioned over the period 2016-18.

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