CAP funding set for ‘firing line’ at EU budget crunch talks

Pressure is mounting on Taoiseach Leo Varadkar to protect Irish farm payments under the next Common Agriculture Policy (CAP) ahead of crunch EU budget talks in Brussels this week.

This Thursday (February 20) the leaders of the EU’s 27 member states will gather for an extraordinary European Council meeting to discuss – and potentially decide – on the bloc’s multi-annual financial framework (MFF) for the next seven years.

EU Council President Charles Michel – who called the meeting – will propose a new overall budget, taking into account the €75 billion hole left in its coffers following the UK’s exit from the union.

In his invitation to member states, Michel urged leaders to approach the proposal in the “spirit of compromise” so as to “avoid further delays”.

Last December, the Finnish presidency of the EU Council – which rotates among member states of the EU every six months – put forward a proposal for a €49 billion reduction to the bloc’s CAP budget for the 2021-2027 programme.

According to an EU parliamentary source, the latest council presidency – held by Croatia until June 2020 – is expected to put forward a proposal for a €54 billion cut to the next CAP budget.

The negotiation process has become even more complex due to opposition from the so-called ‘frugal five‘ (Denmark, Sweden, Austria, the Netherlands and Germany) who refuse to contribute additional money to fill the funding gap. [Ireland has already agreed to upping its contribution].

However, some controversial proposals are now taking further aim at the CAP budget, which is already facing a recommended 5% cut; alongside calls for a substantial transferring of monies from pillar one to pillar two.

In addition to the Brexit conundrum, there is the challenge of funding and implementing the European Commission’s proposed €1 trillion ‘Green Deal’ which aims to transition Europe to a “carbon-neutral economy” by 2050.

The last CAP was allocated a total budget of €408 billion for the period 2014 to 2020. This funding was divided across the two pillars as follows: €308 billion for direct payments and ‘greening’ measures under pillar one; and around €99 billion directed towards rural development under pillar two.

Green Deal

Speaking during a European Parliament plenary session on the MFF in Strasbourg, France, last week, EU Commission President Ursula von der Leyen described this week’s upcoming meeting as “a landmark moment” for Europe.

“We’re all aware of what is at stake here as well. We have clear and shared political objectives, by 2050 Europe declares to be the first carbon-neutral continent.

“Time is pressing. Let me be clear, if we do not reach agreement on the budget within the near future we will not be in a position next year to use our new budgets and our priorities to fund important objectives.

It is high time now. All of us must be ready to find common ground; and what is important is to find the right balance between old priorities and new priorities.

“While there are many member states that strongly defend cohesion policies and rightly so, there are also many member states that defend the Common Agriculture Policy and rightly so.

“But I also expect to see the same dedication when it comes to defending our new priorities.

“I, for my part, will not accept any result which does not guarantee that at least 25% of the budget be devoted to the fight against climate change.

“My expectation is that we adopt a budget that earmarks the resources necessary to fund a ‘just transition’.

If we do not set aside the funds necessary to support regions and workers that are most exposed to the socio-economic consequences and affects of climate change we will simply fail to achieve a climate neutral Europe.

“We all know that the negotiations will not be easy. Citizens will not understand it if decision makers fail to make the funding available for policies needed.

“It is out common responsibility in the European Council and the European Parliament to deliver for Europe.”

Avoiding delays

EU Budget Commissioner Johannes Hahn appeared quite optimistic in his outlook of a deal being reached this Thursday.

“Time has run out and next week it is crucial that an agreement is reached.

“We all want to see an ambitious budget; but we cannot ignore the reality of filling the gap, being a union of 27 comes with its challenges.

“We must deliver on the ‘Green Deal’ for climate neutrality.

“Our focus must be on making sure all the new programmes are up and running by the Jan 1 2021. Let’s avoid delays, let’s be positive and let’s stay united.

“I believe there can be a consensus among member states next week provided there is some good will; some good energy,” he said.

‘Devastating’

Meanwhile, Tim Cullinan president of the Irish Farmers’ Association (IFA) has warned that any proposals pushing for extensive cuts to the CAP budget would be a huge blow for Irish farmers.

“The Taoiseach must now focus on these EU negotiations and not be distracted by the negotiations to form a new government.

A significant cut in the CAP budget would be a devastating blow for Irish farmers and rural Ireland and must be rejected.

“I made it very clear at the IFA AGM in late January that farmers could not take cuts.

“They need an increased CAP budget to at least take account of inflation and any additional asks being placed on farmers,” Cullinan concluded.

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