Reduced seven-year EU budget poses problems for farmers

Reduced seven-year EU budget poses problems for farmers
Reduced seven-year EU budget poses problems for farmers
Dutch Prime Minister Mark Rutte, centre left, elbow bumps with European Council President Charles Michel, right, as German Chancellor Angela Merkel, right, walks by during the EU summit in Brussels where leaders agreed the NextGenerationEU deal.

Irish farmers fear they will be among the losers in the historic recovery funding deal agreed by EU leaders earlier this week.

In the so-called NextGenerationEU deal, member states agreed to jointly borrow on capital markets for the first time, raising €750 billion, including €390bn in grants and €360bn in loans for EU members hit hard by the Covid-19 pandemic.

But the new €1.074 trillion seven-year budget agreed represents funding cuts for many sectors, including agriculture.

IFA President Tim Cullinan said a deal was needed, but the overall funding allocation for the Common Agricultural Policy (CAP) is down 9% (at constant prices), compared to the previous seven years.

“On the one hand, the Commission wants farmers to take costly actions to implement the Farm to Fork and Biodiversity strategies, but on the other hand they don’t want to provide the necessary funding,” he said.

“The Taoiseach now needs to give a clear commitment to all farmers that their payments will at least be maintained in real terms during the transition in 2021/2022 and beyond when the new CAP comes into play,” he said.

ICMSA President Pat McCormack said agriculture has taken a hit. 

“We will need to know how our Government intends to make up that reduction”, he said.

Co-ops, represented by ICOS, said a cut of 10% in the CAP budget is “nonsensical”, given the substantial climate and environmental targets set by the EU and Ireland for the agricultural sector.

Jerry Long, President of ICOS said: “This disparity will need to be addressed through national co-financing and well-targeted and effective CAP interventions that are made accessible to all farmers.

Irish Cattle & Sheep Farmers’ Association president Edmond Phelan said it is very hard to see how farmers can do all they are being asked in the context of significantly reduced CAP funding.

In contrast, Finnish Prime Minister Sanna Marin was particularly satisfied with extra funding in the deal of €400 million for Finland’s agriculture sector.

The next step, after EU leaders agreed the €1,824.3bn package, which combines the seven-year budget and a recovery fund, is European Parliament approval or veto.

National parliaments must also vote through the plan.

“We must now work to improve these instruments,” said European Parliament President David Sassoli. 

The Parliament wanted a bigger seven-year budget, and may insist farmers get a better deal.

“Parliament cannot accept the proposed record low ceilings as they mean renouncing the EU’s long-term objectives and strategic autonomy,” said Johan Van Overtveldt, the chair of the Parliament's budget committee, and five other MEPs.

The Irish food and drink sector has welcomed inclusion of a €5 billion Brexit Adjustment Reserve and said this aid should help Irish companies invest in technology, new products, management training and upskilling, plant renewal and expansion, refinancing, market development and innovation, to regain competitiveness after Brexit.

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