This is a subscriber-only article
The COVID-19 recovery budget, which incorporates the next seven year multi-annual financial framework (MFF) is certainly better for farmers than what was on the table in February, but it is in no way generous. Depending on how it is calculated, it either reverses and provides a small increase on the 5% cut tabled by the previous Agriculture Commissioner Phil Hogan this time two years ago, or it still falls short.
Different calculations
If we apply the 2018 values used in Hogan’s proposal, the latest offering tabled this week suggests €348bn to fund the CAP over the next seven years. However, if current 2020 values reflecting the inflation of the past two years are used, then the value of the CAP over the next seven years is increased to €391bn, spread across the MFF for the next seven years. In an expanded MFF of 1,850bn, this leaves agriculture's share of the EU budget at under 19%, or just half the share that the CAP had in the 2014-2020 MFF - far removed from the 70% share of the budget in 1985.
Improvement
While the EU's support for agriculture continues to diminish, this week’s proposals do represent an improvement, compared to what was on offer in February this year.
In an expanded MFF of 1,850bn, this leaves agriculture's share of the EU budget at under 19%
At the time, pre-COVID-19, the EU were working to an overall budget target of €1,100bn, with an allocation of just €329bn over the next seven years earmarked for the CAP. The current average payment received by Irish farmers is just over €14,400 annually, between Pillar 1 and Pillar 2 payments and schemes.
Under the February proposals, they would have taken a hit of €2,000 on average, but this revised proposal means that this would be restored, with a marginal increase in what farmers would receive using current values for the CAP and marginally less if the 2018 values are used.
Of course, as the IFA have consistently pointed out, the value of the CAP hasn’t been reviewed to reflect inflation since 2005 and while in absolute money terms farmers will receive similar in the next seven years as they did in the last seven, inflation - though relatively low - has reduced the value of the payment.
Environment focus in both pillars
What farmers will also notice in the next CAP, though it remains to be finalised, is the fact that the replacement for the Pillar 1 BPS payment will have up to 40% of it calculated on the basis of environmental activity, similar to what was previously allocated as Greening in Pillar 2 payments. What’s more, most of the money that has been restored in the EU Commission's latest proposal is for Pillar 2, which will be for specific environmental programmes.
Farmers will have to apply for specific environmental works to get the payment. There will be farmers that this won’t appeal to and they will lose out as a consequence.
Most of the money that has been restored in the EU Commission's latest proposal is for Pillar 2, which will be for specific environmental programmes
Next steps
While the new proposals aren’t particularly exciting and the share of the budget has dropped below 20%, they are still an improvement. The process now moves to getting the budget agreed by the EU heads of state, something that is by no means certain, with Sweden, the Netherlands, Austria and Denmark in opposition. However, with Germany and France leading on the initiative and so many beneficiaries, there is a reasonable chance of success.
National plans
If agreed, it then moves to national governments to submit their strategic plans to deliver the CAP and F2F strategy for approval by Brussels. This is where the debate in Ireland will really begin, as there is considerable flexibility for countries to decide how best to deliver the EU objectives.
There will be some debate over who or what is a genuine farmer, how we will achieve 50% reduction in pesticides and 20% in fertiliser. Huge areas with more marginal land are already low users and these could go organic with minimum effort.
However, there will still be issues with more intensively farmed areas and achieving reductions in these without compromising productivity will be more challenging.
SHARING OPTIONS: