IFA allays CAP funding fear
The National Farmer's Union in the UK has warned that last month's EU budget deal ushered in renationalising of the Common Agricultural Policy, but their counterparts in Dublin see no such threat.
NFU president Tim Bennett told the Oxford Farming Conference last week that 8% of the Single Payment may have to be diverted to direct payments for farmers in Romania and Bulgaria.
The EU budget agreement also reduces Rural Development funds for the original 15 EU member states. Final decisions will be made in February or March on the allocation to each country, but the NFU predicts a reduction of €40 million per year.
Member states were also given scope to convert 20% of their direct farm payments into rural development spending, a measure which could cut the Single Payment by billions of euro, if all member states took it up.
This is the main concern raised by British farmers, who point out there is no requirement for funds converted to rural development spending to be matched by EU funding.
But they admit that it is not a worry for countries like France and Ireland, which already have adequate rural development funding, and are committed to direct payments to farmers.
IFA sources agreed with the NFU that Ireland will not avail of the option to divert up to 20% of Single Payment money to rural development. However, they pointed out that a cutback in funding for the European Agricultural Fund for Rural Development, and Ireland's loss of "Objective 1" status, will reduce EU funding to Ireland by more than €100m per year. As a result, one of their priorities is to achieve increased national funding for EU "agricultural rural development" measures such as REPS, Disadvantaged Areas, On-farm investment and Forestry.
IFA also downplayed NFU fears of a cut in the Single Payment to direct money to farmers in Romania and Bulgaria.
Romanian and Bulgarian farmers are due to get €1,312 million in direct payments over three years, starting in 2007. They will get 25% of EU farm payments in 2007, increasing gradually each year until direct payments reach the same level as in the EU in 2016. Both countries have unusually large rural populations, with agriculture accounting for about 44% of total employment in Romania, and more than 26% in Bulgaria.
According to IFA, payments to the two eastern countries will be too small to affect the agreed levels of Single Payments, and sources also pointed out that the underspending of the EU budget for farming last year leaves some leeway.
France's President Chirac and Taoiseach Bertie Ahern emerged triumphant from the December negotiations on the EU budget, insisting that EU agricultural spending was secured until 2014. But the outcome could make it almost impossible for UK farmers to remain competitive, according to the NFU.
"In England and Wales, we will face massive modulation to maintain commitments to agri-environment schemes. This puts English farms at a real disadvantage", said NFU president Tim Bennett.
"The Government has previously assured us that farmers will not lose out because of the negotiations, so we will be pressing the Prime Minister, the Treasury and DEFRA to agree to match funding. It would be ironic and disgraceful if French farmers were to gain a competitive advantage from a deal brokered by the British Prime Minister," said the NFU leader.
