The European Commission has confirmed that it wants to scrap the standalone budget for CAP by merging agriculture funds with other funding streams in the next EU budget.

However, it is also proposing that at least €300bn of this larger ‘single fund’ is set aside solely for the purposes of supporting farmer incomes.

Commissioner for Agriculture Christophe Hansen has suggested that the definition of income supports has been broaden beyond current Pillar 1 schemes to now include other types of farmer payments, like agri-environmental schemes, investment aid and young farmer supports.

ADVERTISEMENT

The new, widened scope of what Brussels wants labelled as ‘income support’ comes as the two-pillared structure of the CAP has been ditched.

“This ringfenced budget represents 80% of the current budget and the ringfenced budget means it is protected only for the purpose of income support for farmers and cannot be subject to flexibilities or reforms as it has initially been floated,” the farm commissioner told MEPs on Wednesday.

“This is very important to ensure stability and predictability for farmers and this was, as well, a key demand from your committee here [agriculture].

“But there is more. It is important to underline that income support is now defined in a way broader sense than the direct income support from the first pillar incorporating not only area-based payments but also all other compensation and payments to farmers, such as the agri-environmental actions, investments, support for young farmers and more.”

Member states can boost funds

Commissioner Hansen signalled a transfer of some of the responsibility of supporting farm incomes back to member states and their own national budgets.

“Let me be clear, the ringfenced amount is the minimum number and member states will invest a bigger envelope based on their needs and planning in different policy areas covered by the national and regional plans.”

The plans referred to are what the next CAP’s schemes will be included in – but also plans for other programmes drawn up funded with EU funding.

“Together with national co-financing for certain measures, this means a much bigger financial potential when it comes to public support,” he claimed.

The EU budget as a whole has been proposed with a built-in inflation adjustment mechanism.

“In practical terms, the annual price adjustment will be equal to 2% whenever inflation is between 1% and 3% and the novelty here is the price adjustment will be corrected to the actual rate whenever the inflation forecast is lower than 1% or higher than 3%.”

See this week's Irish Farmers Journal for a full analysis of the CAP proposals.