After a 30-hour marathon European Council meeting in Brussels last Thursday and Friday, agreement on a multi-annual financial framework (MFF) or EU budget for the next seven years remains a long way off. The proposals tabled by European Council president Charles Michel failed to secure the support of what are now described as the frugal countries that want to limit budget contribution to 1% of gross national income (GNI) and the more ambitious countries that are generally net recipients of EU funds.

Ireland falls in the middle of this group – we are now significant net contributors to the EU budget, with CAP payments the main revenue that Ireland receives in return. This prompted An Taoiseach Leo Varadkar to state that he would not agree a budget in which Ireland was contributing more and receiving less.

Changes during the negotiation

It was ominous for the negotiation when the German, Austria and Dutch leaders departed early on the Thursday night as the president focused on bilateral discussions with other members. When the discussions concluded late on Friday evening, there was a marginal movement to reduce the cut in the CAP budget from €59bn to €54.5bn with an extra €4.4bn promised.

There was speculation in the margins of the negotiation that another special council would be convened for 6 March but this hasn’t been confirmed and it may be the scheduled council on 27 March that revisits the issue.

Either way, much work remains to be completed before the budget is agreed and there remains a huge gap between what is proposed for the CAP compared with last time round. Farmer concerns about the proposed budget falling short are entirely justified.

The last week of March will also coincide with the Commission publishing its Farm to Fork strategy on 25 March.

This is seen as the template for agricultural production in the EU during the term of this Commission under the Green Deal programme.

In the roadmap that is currently open for feedback, the stated ambition for the strategy is to include measures that will “significantly reduce the use and risk of chemical pesticides, as well as the use of fertilisers and antibiotics. These actions will go hand in hand with actions seeking an improvement of animal welfare.”

With the ambition that 40% of the CAP budget will be used on environmental and climate programmes, and little to suggest that the value of the current CAP budget will be retained, pressure on Irish and EU farmers is set to increase further during the period of the next CAP.

Brexit tension growing

Tánaiste Simon Coveney was frank in his assessment of the continued Brexit threat at the Michael Dillon memorial lecture hosted by the Guild of Agricultural Journalists of Ireland. Positions taken by the EU and UK would appear to have confirmed his fears.

In a BBC interview on Sunday morning, the recently appointed DEFRA minister who is responsible for agriculture, George Eustace was ambivalent on the prospect of the UK accepting US production standards on beef and chicken.

Any move from the EU position of excluding hormone-treated beef or chlorine-washed chicken creates an EU-UK collision point at the start of the negotiation of a future trading arrangement.

The EU is finalising its negotiation position this week and the UK is also expected to publish its position with a narrow window until the middle of this year for a negotiation because of the time required for the EU approval process.

A degree of posturing is inevitable ahead of negotiations but even allowing for that, the UK and EU appear on a collision course, especially on the issue of the UK diverging from EU standards.

The reality for farmers is that the greater the divergence, the greater the level of scrutiny involved for trade. That has potential to disrupt the just-in-time delivery model for Irish exports to Britain and while Northern Irish exports should be able to continue uninterrupted, it is less clear what the impact will be on product entering Northern Ireland.

The Irish protocol to the withdrawal agreement provides for a level of scrutiny and this would be determined by the extent of alignment or divergence between the UK and EU in this upcoming negotiation.