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The reflection paper presented by Commissioner for Budget and Human Resources Günther Oettinger in Brussels this week was somewhat predictable, reflecting the reality that a major net contributor to EU funds is about to leave. This paper is the last in a series of five that have been published over recent months following the publication of a white paper on the future shape of the EU in March. The other papers were on the social dimension of Europe, globalisation, deepening of monetary union and defence.
In his paper on the future budget, the commissioner outlines five scenarios, four of which ultimately would mean less money for agriculture and the Common Agricultural Policy (CAP). It also reflects the €10bn gap created by the departure of the UK plus increased ambitions on defence and migration, and suggests under existing funding there would be a €20bn gap in finances.
In one of his options, the commissioner suggests higher contributions by members to the EU budget, which would leave more money to allocate across its departments, including the CAP. However, each of the other four scenarios would mean less money for CAP.
Less money for CAP
In Scenario 1, under the heading of “carrying on”, the proposal is to work within the current agenda of the EU 27 but reallocation of some of the CAP for financing new priorities. Scenario 2 has a “doing less” theme, which is a reduction in overall EU activity and budget, with serious implications for CAP, where expenditure would be significantly reduced. Only farmers under special constraints would receive direct assistance, with risk management tools suggested for other farmers.
In Scenario 3, under the theme of “some do more”, provision is made for increasing expenditure in some areas, funded by participating countries through increased contributions or a new revenue stream such as a financial transaction tax. This model could enable funding of agriculture among those members that were committed to it. However, in the process, the Common Agriculture Policy would surely lose part of the “common”.
Scenario 4 is themed as a “radical redesign”, with ending of all rebates to members and a review of VAT, with a new own-resources model of finance. This would also lead to a cutting of direct payments to farmers with focus on areas of natural constraint and agri-environmental schemes and risk management tools offered to other farmers.
Scenario 5 is the “doing more together” option, which suggests increased budget contributions and expanding EU activity in all areas, including agriculture.
Future discussion
This paper is a formal starting point for discussion of the EU budget after 2020. As CAP has currently 40% of all EU expenditure, it is inevitable that every interest group in the EU looks at it as a source of funding for their ambitions. Agriculture certainly has a tough fight on its hands to retain share of the budget in the years ahead as well as finding the resource to plug the gap left by the UK.
If there was a positive note in the commissioner’s outlook on CAP, it was that while he wanted radical reform, he believed the programme should continue to provide subsidies to farmers.
SHARING OPTIONS: