New EU budget proposals have ‘a sting in the tail’ – ICOS

The revised proposals for the EU budget and a Covid-19 recovery plan, which were announced today, Wednesday, May 27, will have a negative impact on rural economies, according to the Irish Co-operative Organisation Society (ICOS).

The updated proposals for the EU’s Multiannual Financial Framework (MFF) for 2021 to 2027, revealed today by the European Commission, increases the funding for the Common Agricultural Policy (CAP) compared to recent proposals – but still entails a decrease of close to €35 billion compared to CAP funding for the 2014 to 2020 CAP.

This would result in a cut to Pillar I payments of some 10%, an ICOS statement warned. The society highlighted that this cut in payments would hamper the economic sustainability of many farms.

Direct payments are the central supports for farmers managing today’s difficult market situation which has provided low market returns long before the Covid-19 crisis struck. For 60% of Irish farmers, their direct payments represent over 100% of their farm income.

“A cut of this size will have significant implications for the sustainability of many farms and the ability of our rural economy to survive the economic downturn. At a time when we need additional supports for our farmers and rural communities, this proposal to continue to cut funding to the CAP is hugely disappointing,” ICOS stated.

The newest proposals for the EU budget – which are designed to stimulate economic recovery in the wake of Covid-19 – also envisage a €40 billion Just Transition Fund for climate and environmental actions.

ICOS said that, while this fund would be “vital” in helping farmers achieve environmental targets, it is “still unclear just how much of this funding will be made available to agriculture”, as the fund is targeted to achieving carbon neutrality and environmental protection across other sectors also.

Given the substantial climate and environmental targets set specifically for the agricultural sector, a cut to the CAP budget is entirely unacceptable, as the CAP remains the key driver through which farmers act on carbon sequestration and preserve natural habitats.

“The next European Summit is scheduled to take place in Brussels from June 18 to June 19. It is vital our politicians take every possible initiative to ensure that the CAP budget is at least maintained at current levels, as promised by many during the last general election,” the ICOS statement concluded.