Farm Ireland

Monday 20 November 2017

Tough talking but fears ease on EU budget

Declan O'Brien

Declan O'Brien

The potential impact of the EU budget proposals on the CAP may not be as bad as was initially expected. The farm budget has been held at €371.7bn for the seven-year period, which equates to an annual spend of €53bn.

Obviously, there are elements that are less than ideal. The proposal that 30pc of payments under the production-related Pillar I of the CAP should be linked to 'greening' measures is worrying. Likewise, the reduced emphasis on market measures could pose difficulties in the future for Ireland.

The experience of 2009 is still fresh in farmers' minds, and Ireland will be keen to keep such tools as intervention and aid to private storage in the Commission's armoury, particularly given the increased volatility in world markets.

On the flip side, there is much to be positive about in the proposals.

The clear commitment to target CAP payments at 'active farmers' is encouraging and comes on the back of a Court of Auditors report on the single farm payment (SFP) scheme which found serious failings in its operation in some member states.


A commitment to deliver more equitable payment allocations across the EU tallies with the goal of Agriculture Commissioner Dacian Ciolos on this matter. Indeed, there was much in the budget proposals that tied in neatly with the aims of Commissioner Ciolos's reform agenda.

The political horse trading now moves to government level. With the Commission's proposals for spending limits set, Commissioner Ciolos is free to draw detailed plans for the reform of the CAP which must then be agreed by the member states.

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Department of Agriculture sources are said to be reasonably happy with the direction of the reform process. The strategy adopted by the department has one primary goal -- to hold direct payments of farmers at as close to current levels as possible. The indications are that direct payments will not take a direct hit. However, the fact that they are not index-linked means inflation will invariably dilute their worth in real terms over the seven-year term of this funding round.

The negotiations on both the EU budget and CAP reform, which will run in parallel, are likely to be long and difficult. The fact that France has elections next year means Nicolas Sarkozy will be unlikely to give ground on anything that hits the incomes of the powerful farm lobby.

However, comments from Germany's Guido Westerwelle on the budget proposals, which he labelled "irresponsibly high", highlighted the differing views on the issue.

Indo Farming