Farm payments in excess of €5,000 to be cut by 10%
It was agreed by EU agriculture ministers in last week’s CAP health check talks that this money, diverted to rural development, may be used in the dairy sector, as well as the proposed uses in climate change, renewable energy, water management, and biodiversity.
Germany, particularly, pushed for rural development cash to support the milk sector.
Member states will be allowed to transfer currently unused Single Payment Scheme money into their rural development funds, or use it to help farmers producing milk or meat in disadvantaged regions, or in “vulnerable” types of farming.
It may also be used to support risk management measures, such as insurance schemes for natural disasters and mutual funds for animal diseases.
The EU will co-finance the new rural development expenditures of 75% (and 90% in the poorer convergence regions), representing an increase on proposed co-financing, in order to reduce the burden on national budgets.
Instead of member states matching additional EU funding euro for euro, they will now only have to contribute €1 for every €3 of EU funding.
An additional cut of 4% will be made on single farm payments above €300,000 a year.
It was agreed to increase milk quotas by 1% per year between 2009/10 and 2013/14. For Italy, the EU’s leading over-producer of milk, the full 5% increase will be introduced in 2009/10.
Throughout the EU, in 2009/10 and 2010/11, farmers who exceed their milk quotas by more than 6% will have to pay a levy 50% higher than the normal penalty.
Measures have been introduced to support dairy farmers likely to be adversely affected by this increase in quotas.
Intervention in the milk sector is unchanged.
For butter and skimmed milk powder, limits will be 30,000 tonnes and 109,000 tonnes, respectively, beyond which intervention will be by tender.
It was also agreed to abolish arable set-aside and further simplify cross compliance. And agriculture ministers agreed on free distribution of fruit and vegetables in schools, and allocated more than €90m to this.
Maximum rural development support for young farmers (including installation aid and interest rate subsidy) will be increased from €55,000 to €70,000.
* Following last week’s political agreement in the Agriculture and Fisheries Council, full legislative texts will be drawn up, probably in December or January.
Detailed implementing rules will then be drawn up by the Commission and most of the provisions will enter into force in 2009 and 2010, and run to 2013.
Next up for discussion will be the future of the CAP, post-2013, during the forthcoming EU budget review, and the negotiations on the budget for 2014 to 2020.
