Commission proposal for 1.39% cut to CAP payments in 2016

It has been proposed that payments to farmers are to be cut by 1.39% next year in order to provide funding for the European Commission’s crisis reserve.

In order to ensure that the crisis reserve of €441.6m is available in the 2016 budget, the proposal aims to reduce CAP Direct Payments exceeding €2,000 by 1.393041%, with the exception of direct payments for farmers in Bulgaria, Romania and Croatia as they are still being phased-in in those Member States.

This compares with a rate of 1.302214% that was applied for 2015 while the crisis reserve amounted to €433m.

According to the budget rules, the Commission is obliged to table a proposal on financial discipline before the end of March.

The Council and European Parliament now have until June 30, 2015, to fix the rate of financial discipline. In the absence of such an agreement by June 30, the Commission will set the rate.

In drawing up the 2016 Draft Budget, the first budgetary estimates for direct payments and market related expenditure show that the net balance available for EAGF expenditure for 2016 is not likely to be exceeded and an additional financial discipline for budget year 2016 is therefore not needed for the purpose of respecting the EAGF ceiling.

In October, the Commission will present an amending letter to the 2016 draft budget, which will update forecast budget needs.

In that context, the Commission may then also update the rate of financial discipline no later than December 1.

According to CAP legislation, amounts generated by financial discipline which remain available in the EAGF budget at the end of the financial year, including those of the crisis reserve, shall be reimbursed to farmers.