Farm View: The road to CAP reform runs through the EU budget battle
Broadly speaking, the 27 member states can be split into those wanting to cut hundreds of billions of euros from the EU budget, and those seeking to protect existing programmes such as the CAP.
CAP reform has a very long way to go yet, and the acres of Eurospeak and Brussels jargon are best left to the negotiators, as the Irish presidency drives efforts to prepare the European Council political agreement on the EU's long-term budget for 2028-2034.
With a far-reaching CAP reform proposal interlinked with EU budget proposals, it is probably futile at this stage to predict what kind of policy farmers will work under from 2028 onwards.
Maybe the most informative “straws in the wind” are the attitudes of individual member states to EU budgets and expenditure on agriculture.
Broadly speaking, the 27 member states can be split into those wanting to cut hundreds of billions of euros from the EU budget, and those seeking to protect existing programmes such as the CAP.
What complicates matters is that the European Commission has proposed traditional policies such as agriculture and regional cohesion be lumped together with other programmes such as security, fisheries and migration. The aim is to free up space for new EU priorities such as defence and competitiveness.
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However, the radical proposals have still left six member states in the “frugal” camp, with Germany leading Austria, Denmark, Finland, the Netherlands and Sweden, all calling for drastic budget cuts. But three other net contributors to the EU budget share at least some of the frugal camp’s interests. They are France, Belgium and Ireland.
But can we and other member states call simultaneously for both generous agriculture and EU defence funding?
Traditionally, we sided with France, always guaranteed to look after farmers.
But the French economy is at a standstill, amid concerns over the country’s ability to bring its public finances under control.
French president Emmanuel Macron has proposed “smart” EU budget cuts that would spare France’s priorities, such as agriculture.
It is hard to see how France and Belgium’s wish for an ambitious EU budget, while limiting their net contributions to it, can come true.
It is not surprising France is the number one supporter of new revenue streams to finance the EU budget, independent of annual national contributions. But Spain is the only other member state strongly supporting new revenue sources.
Spain has also repeatedly called for new joint EU borrowing.
The European Commission proposed a record budget of nearly €2trn, equivalent to 1.26% of the EU’s gross national income. The most penny-pinching of the frugal member states, Sweden, wants to cap the EU budget at 1% of gross national income, including debt repayments. And Germany may not be far behind Sweden.
In contrast, Spain pushes for a budget at 2% of EU GDP.
At the other end of the spectrum from Germany and Sweden, the 17 “friends of cohesion” member states welcomed the commission’s proposal as a good starting point for negotiations. But their wishes for protected CAP and regional policy, together with increased spending on defence and competitiveness, seem over-ambitious.
These trifling matters mattered little to EU agriculture ministers, led by Martin Heydon, when they recently reached a partial agreement on the CAP reform.
Farmers across Europe were baffled by how they could agree on a policy without knowing its budget.
But the agriculture ministers know everything will change, when the really big EU decisions are made by the 27 leaders in all-night sessions many months from now.
