Cowen: CAP budget must match environmental ambition

New Minister for Agriculture, Food and the Marine Barry Cowen got straight to work on Monday, in a video conference of EU agriculture and fisheries ministers.
Cowen: CAP budget must match environmental ambition
Croatia's minister of agriculture Marija Vuckovic greeting Germany's federal minister of food and agriculture Julia Klöckner with an elbow bump at Monday's conference of EU agriculture and fisheries ministers.
Minister Cowen taking part in the EU Ag Fish Council video conference.
Minister Cowen taking part in the EU Ag Fish Council video conference.

New Minister for Agriculture, Food and the Marine Barry Cowen got straight to work on Monday, in a video conference of EU agriculture and fisheries ministers.

On the agenda were CAP reform, fishing opportunities for 2021, and by-catch of protected species such as dolphins, porpoises.

Mr Cowen stressed the need to match increased environmental ambition in the CAP with an appropriate CAP budget to ensure achievement of this ambition. He said: “Ireland has always favoured a strong green ambition in the new CAP. As we move forward, if we are to deliver on the environmental ambition, we must provide the necessary financial support for farmers.”

He called for full impact assessments of the EU’s new Farm to Fork and Biodiversity strategies, and for further clarity on CAP reform proposals that will underpin environmental objectives, including conditionality and eco-schemes.

Mr Cowen noted significant progress towards delivering sustainability in fisheries, which he said is of huge importance to Ireland.

“There has been considerable progress made in rebuilding fish stocks in recent years under the framework of the Common Fisheries Policy. However, I made clear that we face serious issues involving our quota shares and access to UK waters.”

Croatia's minister of agriculture Marija Vuckovic greeting Germany's federal minister of food and agriculture Julia Klöckner with an elbow bump at Monday's conference of EU agriculture and fisheries ministers.
Croatia's minister of agriculture Marija Vuckovic greeting Germany's federal minister of food and agriculture Julia Klöckner with an elbow bump at Monday's conference of EU agriculture and fisheries ministers.

But everything is on hold for progress on the Next Generation EU proposal to borrow on the capital markets and pass the money as grants to member states worst affected by Covid-19, for recovery from the worst recession in EU history.

Charles Michel, president of the European Council, has started negotiations with the member states, and will convene an in-person summit around mid-July in Brussels, to focus on concrete proposals. This meeting is too important for video, with the EU leaders due to go face-to-face, despite the virus.

“We are aware that it is essential to take a decision as soon as possible,” said Mr Michel. Into this state of EU funding uncertainty, the EU Commission has pitched a proposed budget of €166.7 billion for 2021, to be complemented by €211bn in grants and approximately €133bn in loans from the as yet unagreed recovery fund.

It includes €55.2bn for the CAP, and IFA President Tim Cullinan has said this draft budget is totally unacceptable and must be rejected by the new Government.

The €55.2bn is nearly exactly one seventh of the earlier proposed €391bn for the CAP. According to Irish government figures, that compares with €403bn for 2014–2020. The proposed breakdown for member states is not clear. Agriculture Minister Michael Creed had welcomed the €391bn proposal, saying it is €10bn ahead of the first proposal in May 2018, by Commissioner Phil Hogan.

The proposed funding for the 2021-2027 EU CAP is not as low as farming organisations across Europe say it is, according to CAP reform expert Alan Matthews.

In his latest contribution to the http://capreform.eu blog, Matthews says if the 2014-2016 inflation rate continues, implying 1% inflation, then the Commission proposal would actually maintain the real value of the CAP budget.

“While predicting macroeconomic indicators so far into the future is always risky, this does not seem to be an unreasonable assumption at this point in time.”

He said farmer organisations claimed that proposals reduce the CAP budget in constant 2018 prices, but they did not fully take into account inflation, nor the European Commission updating its overall budget each year by 2%, to counter inflation. For example, IFA President Tim Cullinan has said the proposed EU budget for 2021-2027 amounts to a 9% cut in the real value of CAP funding.

But Alan Matthew’s analysis of the proposals shows a small (5%) cut in the volume of resources in constant price terms, compared to 2020, but a small increase (2%) in current prices.

If current price amounts are increased each year by 2%, but inflation remains subdued, at 1% per annum over the programming period, the real value of payments to farmers will be maintained. However, Matthews disputed the EU Commission claim that their latest CAP budget proposal is 2% higher both in current and constant 2018 prices than the 2014-2020 budget. “Correct for current prices, but implausible for constant prices,” said Matthews.

However, it could all be academic unless the EU can agree on the proposed Next Generation EU recovery.

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