Single Farm Payment in EU budget turmoil
Leaders of the 25 member states will be under intense pressure between now and June to agree the EU budgets for 2007 to 2013.
They will focus on the CAP spending which accounts for nearly half of the EU's annual budget. Nearly quarter of the EU's budget consists of direct payments to farmers, most of which are converted into the SFP this year.
Luxembourg's Prime Minister, Jean-Claude Juncker, succeeding Ireland's Bertie Ahern as EU President, wants governments to agree a joint position on the EU's budget before June. But he's up against EU and national votes looming in Spain, France, Germany, Poland, and the UK, which could cause political paralysis across Europe.
Leaders will be slow to negotiate and compromise at EU level, with general elections and referenda to worry about at home. And compromise will be needed, because the UK, Germany, France, Austria, Sweden, and the Netherlands want to cut the EU budget, while other member states want the bigger budget which is needed to carry the CAP to 2013, pay for the sugar market reform, and take in the farmers of two new accession states, Romania and Bulgaria.
Budget agreement is also endangered by an argument between Spain and Poland over regional funding. And when the UK takes over the EU presidency for six months from July, budget progress is even less likely, as the proposals on the table include scrapping an annual €3.5 billion rebate to London.
Anyway, Prime Minister Tony Blair cannot make big EU concessions, with his own general election and an EU Constitution referendum to face within the coming year.
The EU budget, and the CAP spending which makes up so much of it, will rarely be out of the news between now and January 2007, when the Brussels timetable requires expenditure plans to be signed and sealed.
Farmers can only hope the CAP budget reaches 2007 relatively unscathed; if so, the Single Farm Payment will have passed its biggest test all the way to 2013. But until then, there is the danger of an unacceptable cut in the Single Farm Payment, according to IFA President John Dillon.
He has called on the Irish Government to back the EU Commission and oppose the "Gang of Six" countries that are against an EU Budget increase.
"Between 2007 and 2013, agriculture will be the main vehicle to draw down EU funding for Ireland. Apart from the importance of this to the farming sector in Ireland, I believe it is in Ireland's long-term interests to support the development of the economies of the new member states. Ireland has done well from EU membership. The new countries deserve a similar opportunity," said Mr Dillon at the IFA's 50th AGM.
