Mixed response to enlargement funding plan

AS the European Union outlined to accession States yesterday how it intends to finance expansion to the east, the reaction of the Irish farm lobby to the deal remained divided.

The leaders of the 10 accession States travelled to Copenhagen for a briefing on the funding package, which was finalised by the EU after a two-day summit in Brussels last week following a French-German compromise.

Under the deal, direct farm aid to accession countries would be phased in from 2004. From 2007, spending would be capped and would not increase beyond the rate of inflation up to 2013.

ICSA president Charlie Reilly, cautioning against getting carried away with the agreement, said it was important there was a commitment to funding the CAP in the 2007-2013 period.

But it was hard to see how the funding of 46 billion (a 4bn increase) will cover the needs of the new members without reducing the amounts available to existing EU states.

"This is especially so as the intention is to bring the payment levels for new members up from 25% in 2004 to 100% in 2013," he said.

Mr Reilly said the agreement does not resolve the issue of what kind of CAP will be in place in the future. There is no doubt significant CAP reform remains firmly on the agenda, even if implementation dates are less clear, he said. IFA president John Dillon said the major implication is the unbalanced Fischler reform proposals for the CAP must go back to the drawing board. He said budget security for the CAP up to 2013 is much more likely as a result of the French-German deal. ICMSA president Pat O'Rourke warned that the French-German agreement will result in cuts in support for Irish farmers"The solution to this problem is increased funding to finance the CAP and not to make the income situation worse for all farmers," he said.

Mr O'Rourke said that from 2007, based on this agreement, there could be substantial cuts in farmer payments to fund enlargement. Fine Gael agriculture spokesperson Billy Timmins said the French-German deal will stall the Fishcler proposals until at least 2007.