Budget funds needed to stem EU’s loss of 1,000 farms a day

by Stephen Cadogan

Reviving the failed generational renewal in European agriculture is one of the good reasons why member states should strive to maintain the EU’s agriculture spending.

The EU is losing 1,000 farms each day. In 2005, there were 14.7 million farms; in 2013, it was only 10.5m, and the number now is about 10m.

There was also a reduction in the number of young farmers, and in the amount of land held by young farmers, from 2005 to 2013.

European Court of Auditors members have warned there is no generational renewal in EU farming, a “very serious” problem in EU agriculture.

It could quickly get worse, if the feared reduction in the budget for the Common Agricultural Policy materialises.

However, recent comments by EU Budget Commissioner Günther Oettinger pointed to a plan to maintain CAP spending. According to Irish CAP expert Alan Matthews, the EU Commission is likely to propose a plan that shields the CAP budget from further cuts.

However, that would require additional gross contributions from member states, substantial in some cases, says Matthews.

The EU budget must ultimately be agreed unanimously by all member states and their national parliaments, and gain the approval of a majority in the European Parliament. If member states and MEPs want to keep people on the land, they should agree to maintain CAP funding, and insist it be put to good use in maintaining the EU’s farming population.

That is not happening curently, with European Court of Auditors figures showing a million fewer farmers aged under 45 compared to 2005, with only 2.3m left in 2013. The number of these “young” farmers fell in all but two member states, Romania and Slovenia, despite EU expenditure of €3.2 billion to encourage young farmers (including €6m for 800 young farmers in Ireland).

By 2013, 80% of European farmers were over 45, and one third were older than 65.

Only Austria and Poland had more than 10% of their farmers aged under 35.

Only Germany, Austria and Poland had less than 10% of their farmers older than 65.

In Ireland, 6.3% were under 35, 26.5% were older than 65.

Court of Auditors members recently in Ireland to address two Oireachtas Committees said the emphasis must change to help older farmers to move out, rather than encourage young farmers.

They said generational renewal is better in Poland, thanks to a pension fund for old farmers, and in Germany due to that country barring those still farming from claiming an old-age pension.

Since 2013, EU measures have changed, but Court of Auditors members warned that the new system of a 25% top-up in direct payments for young farmers has “much dead weight”, with the extra 25% often going to people who would have taken over the farms anyway, and probably not many specifically taking over a farm simply because of the 25% they will get for a five-year period.

Member states and MEPs negotiating the EU budget over coming months should also take the advice from the Court of Auditors to insist that the Common Agricultural Policy and its budget be inspired by a longer-term vision of the development of European agriculture, not over the EU’s seven-year budgeting period, but over 27 years.

This should include a clear policy for the future, visualising for example how many farms the EU should have in the long-term, and how big they should be.

Alan Matthews predicts the CAP’s share of the EU budget will fall from 35% to 30% of the EU budget, but that outcome would leave the CAP budget broadly maintained in nominal terms, and it now seems unlikely that budget pressures will be a driver of any major CAP changes in the next period.

Because the direct payments which make up more than 70% of it are not indexed to inflation, the CAP budget is not so demanding of annual increases. With that leeway, it is time to start paying farmers to retire, to make way for the new blood which is even more vital for agriculture that budget euros.

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