14 February 2013

4 minute read

Europe

The seven year EU budget agreed by the EU summit today also provides the clarity on EU agriculture funding needed to allow completion of the negotiations on CAP reforms.

Minister Simon Coveney, speaking in Brussels at the conclusion of the European Council meeting, said: “the baton now passes to agriculture and fisheries ministers and to MEPs, to hammer out the details of the reformed agriculture and fisheries policies for 2014 to 2020."

Minister Coveney said that Irish farmers were keenly aware of how important the agreement was for their future: “I am very pleased that we have protected Irish farmers’ direct payments. There were substantial threats to this vital transfer to Ireland from those who wished to cut the CAP budget overall by up to 30 per cent and from the redistribution of these funds between member states”, said Minister Coveney.

Ireland had negotiated hard, and in particular had protected its allocation by promoting a favourable formula for redistribution that was adopted by the Commission and agreed. Irelands Direct Payment ceiling will be over €1.2 billion per year, with a very small reduction to accommodate new member states. “This funding directly supports farm incomes, but, as farmers spend locally, it also delivers wider benefits and supports jobs throughout rural Ireland.”

The Minister said now that we have successfully protected our direct payment funds, the next big issue for Irish farmers is how this money will be divided among farmers.

“As president of the Council of Agriculture Ministers I will be making proposals on this key issue within the next few weeks. I will be seeking reasonable flexibility for Member States on how these funds are distributed. I want to see payments distributed more fairly between farmers, but I want a sensible level and pace of change that will not disrupt our most active and efficient farmers as they gear up to meet the ambitions of our Food Harvest strategy”.

In relation to the ‘greening’ of direct payments Minister Coveney said that the summit had endorsed the direction of the Commission’s proposals and that 30 per cent of the national payment ceiling would be linked to the new green criteria. Minister Coveney said that no decision had been made on whether the new green payment would be made as a flat rate or as a percentage of a farmer’s payment.

“This is now a matter for agriculture Ministers to decide. My views are well known – I favour Member State flexibility on this issue, and I will propose this approach to my colleagues in the Council of Agriculture Ministers."

Minister Coveney said that Ireland had fought hard, along with some other Member States, to protect all CAP funding, including that for rural development. As part of the final deal, the overall EU funding for rural development was reduced from the previous financial period.

With a new distribution of funds between member states, this will mean an Irish allocation of approximately €313 million per year in current terms. This includes a special allocation of €100 million, over the full period, negotiated in the final stages of the talks.

“The challenge for us now is to ensure that this money, which will be matched with Irish exchequer funding, is used as effectively as possible to support the aims and targets we have set ourselves in Food Harvest 2020. The agri-food sector has tremendous potential for further sustainable growth and we must use these funds to maximise that potential and deliver the jobs dividend that will come from it," said the Minister.

Ireland will also benefit from CAP expenditure on market support measures, but the precise figures will depend on commodity market developments. Taken together the EU funding to Ireland from direct payments, rural development and market supports will amount to over €11 billion over the seven year period 2014-2020.

The Minister noted that the summit had also reached conclusions on a number of other issues that are central to the CAP negotiations including:

• The co-funding rates for rural development: the general rate will be 53 per cent
• Capping of direct payments will introduced on a voluntary basis by Member States.
• The new ecological focus areas will be implemented in a way that does not take land out of production and avoids unjustified income losses to farmers.
• Transfers of up to 15 per cent will be allowed between direct payments and rural development.
• Provision is made for an agriculture crisis reserve – funded as required from direct payments.

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