Fighting for EU farm funding

THE main question on farmers’ lips during the European election canvass was, “What will happen the single farm payment after 2013?”

If candidates were truthful, they could have held out little encouragement of farmers retaining their full payments — especially if they are getting more than average per hectare.

MEPs with the interests of Irish farmers at heart will have to get straight down to intensive work to counter factors which endanger the €1.3 billion single farm payment (SFP) which has been supporting agriculture here since 2005.

The settling-in of the member states in central and eastern Europe that joined the EU in 2004 is the main factor threatening the SFP in its current form.

They are furious that the average SFP in the 15 “old” member states is nearly €300 per hectare, but less than €200 in 12 “new” member states — even though the 12 include Malta, which gets one of the biggest SFPs of all, at more than €500. At the other end of the scale is Latvia, which will have less than €100 per hectare, even when their direct payments are fully phased in.

The strength of feeling in central and eastern European countries about how unfair the SFP is, and their co-ordinated intent to do something about it, has surprised the EU.

Portugal has joined them in seeking changes — and a flat-rate payment per hectare across the EU is the group’s No 1 demand.

In terms of the qualified majority voting system in the EU Council, this is a group that cannot be ignored. The main losers in flat-rate payment per hectare system will be Greece, Malta, Belgium, Holland and Denmark — but their combined voting power would not be strong enough to block any proposed re-allocation of funds.

The EU Council has already committed to address the differing level of direct payments between member states, after 2013.

The phasing-in of CAP direct payments in the 12 new member states is also important because it will push France across the line to become a net contributor to the CAP budget (whereas up until 2012, French receipts from CAP funds will outweigh the amount it puts into the EU budget). For Britain, Germany, Sweden, Austria, and Holland, their already significant net contribution will become even higher, as the 12 new member states qualify for their full payment.

Because of this trend, the political will to channel about one-third of the EU budget into the CAP is fading fast in the main paymaster capitals — a major factor, especially if the economic crisis does not start to lift next year.

The French government has seen the writing on the wall, and moved to avoid isolation on the issue of CAP reform — which will go live next summer when the next European Commission will launch a public debate on post-2013 CAP funding.

France has embraced reform, by re-distributing €1.4bn of its overall €8bn aid (18% of the CAP total). Direct aid to French cereal farmers will drop by €5,900 on average, a 17% cut, while French sheep farmers will gain €7,800 on average. The French may seek a similar re-balancing across the EU.

Agriculture Commissioner Mariann Fischer-Boel recently held out the prospect of the income component of direct payments being phased out, and said some other income support would be needed in that case.

She said payments are needed to sustain farming in large areas and avoid the serious environmental, economic and social consequences of further intensification and industrialisation of farming.

Farmer support is needed, so that crises don’t turn into disaster for the agricultural production base.

She is convinced the EU should keep an income safety-net for farmers, but speculated that it should be totally decoupled and without historical links, and perhaps even targeted on active farmers alone.

However, other members of the European Commission may look at Ireland’s rejection of the Lisbon treaty, and interpret it as a warning to direct EU funds away from agriculture, and use them to “connect” better with unhappy No voting citizens — perhaps by switching funds into new European common energy and research policies and tackling climate change and environmental issues, which are widely seen as more acceptable to “Joe Taxpayer”.

That is why explaining why Ireland rejected the Lisbon treaty will be one of the most urgent tasks facing our new MEPs.

Ireland said No, despite our position as a net financial beneficiary of the EU — thanks mainly to our big haul of farm and food funding from Brussels.

Our Taoiseach and agriculture and finance ministers will all be around the negotiating table, for what is expected to be the biggest ever reform battle, to agree the shape of the CAP after 2013.

Their main argument in favour of farmer funding may be the food security one. They can point out that in Britain, traditionally anti-CAP, farm income without support payments would have been negative in seven out of the last 11 years, and never better than marginally positive.

The outcome would have been similar or worse in Ireland and most other member states, and food and environmental security would surely be in an even worse state than it is.