Commission must not fall into Brexit’s ‘CAP trap’

John Comer, ICMSA president

The reports circulating that the weight of the reductions to the EU budget that will result from the disappearance of the UK’s contribution will fall on CAP are profoundly alarming and should have every rural TD sitting straight.

In terms of economic impact and positive multiplier effect there’s no disputing the fact that the EU’s direct payments are the most significant factor in very large areas of the State.

Thankfully, informed commentary has long since moved on from the silly ‘cheque-in-the-post’ caricature that distorted the public’s perception of what CAP was and how it functioned. Most people now realise perfectly well that the direct payments made under CAP represent the EU’s recognition that in a context where the EU itself is unable or unwilling to force food corporations to pay farmers and primary producers a fair price that it is incumbent upon the EU to make up the difference.

The direct payments are effectively an admission on the part of the EU that it will ‘top up’ the wholly insufficient prices that the corporations pay the farmers in the absence of any regulatory interference or pressure by the EU. The EU’s policy is one that demands ‘cheap food’ where the supermarkets in the great cities can sell highest standard food at artificially cheap prices with the retailers being able to use their enormous commercial clout to dictate the price backwards to (literally) the cow without any even token protection by the EU.

What was important is that the urban consumers can get excellent quality at the cheapest prices and the difference between the lowest prices the retail corporations were able to get away with paying and the farmers being able (to just) about keep going was the direct payment under CAP.

I’ve said it before but I’m going to repeat it — direct payments under CAP were not a subsidy to the farmers, they were (and still are) a subsidy to the retail corporations that enable them to underpay the farmers and undercharge their customers.

It’s is a little ironic that the member state that was most vociferous in its support for the ‘cheap food’ policy and its disdain for the compensatory CAP regime was the UK. Its withdrawal from the EU and the reduction in the overall budget by its approximately €11bn per annum will have serious implications for the EU budget — we accept — but the idea that CAP and the direct payments made under it will have to be cut as part of the reduced Budget actually means that Brexit will end up ‘double-penalising’ Ireland, and that, ICMSA does not accept.

The idea that the bill for Brexit can simply be passed on to the farmers is as unfair as it is absurd. However, we have been here before; when the sanctions and trade bans applied between the EU and Russia left everyone else unscathed except the EU’s farmers who lost their markets and the resultant income at the same time as a ruinous slump in milk price brought dairy farmers throughout Europe to the edge of commercial survival. It is absolutely unacceptable that one of the EU’s ‘flagship’ achievements — excellent quality food to its citizens at cheap prices — will now be jeopardised by the UK’s exit and the most superficial analysis that merely looks at existing budgetary allocations without consideration for the easily predictable consequences of projected cuts.

Two of those easily predictable consequences are acceleration of the already alarming haemorrhaging of people out of indigenous EU farming and primary food production.

In other words, what’s left of mainland EU’s family farm system will disappear and we will see a ‘corporatisation’ of farming and food production. The production and consumption of food will become a corporate operation from farm to fork — something that I believe to be negative and to the detriment of the consumers.

Cuts to CAP and direct payments will also see a very significant spike in EU food inflation as farmers desperately try to recoup income loss by demanding higher prices for their produce, in doing so they will run straight into the ‘cheap food’ policy tacitly and jointly operated by the retail corporations and the commission. The resulting chaos — social, political, economic and regional — can only be guessed at and feared.

The two greatest achievements of the EU were eliminating the possibility of conflict within its member states and the provision of food produced to the highest standards on the planet and available at cheap prices to its population. That second achievement is the one with day-to-day practical resonance and CAP is the means by which it is possible.

Diminishing CAP means diminishing that achievement and perversely confirming the arguments of the anti-CAP Brexiteers.


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