€13.35m back to Ireland as reserve fund money swap from EU to farmers continues for seventh year

€13.35m back to Ireland as reserve fund money swap from EU to farmers continues for seventh year
How "financial discipline"  works: for the past seven years, the EU had deducted 1.4% from direct payments to farmers and gave it back to them the year after.

For the seventh year, the reserve fund generated by 1.4% deduction from farmers’ CAP direct payments has been returned to them unspent.

Since the establishment of the crisis reserve in 2014, it never been used, and the money set aside each year was returned to farmers.

In April, there were proposals — from some MEPs, for example — that the €478 million reserve be used to help farmers get through the Covid-19 crisis.

But European Commissioner for Agriculture and Rural Development Janusz Wojciechowski said that activating the crisis reserve ultimately means less money for direct payments, namely the money that “our farmers constantly rely on.”

“This would not appear to be a good move in the current crisis,” said Commissioner Wojciechowski.

In addition to creating the crisis reserve each year, the financial discipline mechanism can also be used to ensure expenditure on direct payments and measures to regulate agricultural markets stay within annual limits of the overall seven-year EU budget.

CAP legislation requires that amounts generated by financial discipline which remain available at the end of the financial year be reimbursed to farmers.

In Ireland, the reimbursement of €13.35m from the 2019 financial discipline to almost 100,000 farmers was announced last week by Agriculture Minister Michael Creed.

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