After months of anticipation, the European Commission has now published its proposals for the EU budget for 2021-2026.

Last June, the Commission’s Reflection Paper on the Future of EU Finances acknowledged the “gap in EU finances from the United Kingdom’s withdrawal and from the financing needs of new priorities” and concluded that “hard choices will have to be made”.

In my speech to hundreds of IFA members in Kilkenny last month, I said: “Brexit is blowing a €12bn hole in the overall European budget, and other priorities such as security, migration and defence have grown in prominence in recent years. Another €12bn is demanded by many member states to ensure delivery of those policies too.”

Increased contributions

Both the Budget Commissioner, Günther Oettinger, and I have been urging member states to increase their contributions to the EU budget to make up for the Brexit shortfall and to fund the new priorities and, to be fair, the Taoiseach has supported this call.

Because the heads of state and government have yet to agree to increase their budget contributions, the budget for 2021-2026 assumes no increased member state contributions. Anticipating that scenario, I told the Kilkenny event: “In the absence of more money from member states, there will be a cut to the CAP budget, and there’s no point trying to sugar-coat that fact.”

The budget proposed by the Commission includes a modest 5% reduction in the budget for the Common Agriculture Policy, compared with the current (2014-2020) budget. Against a strong headwind of Brexit and the competing demands of other emerging priorities, I regard this as a very fair outcome and one that supports my argument and that of Irish farm leaders for a well-funded policy, which will continue to support tens of thousands of Irish farmers.

In the hundreds of meetings that I have had with farmers in virtually every member state of the EU, the constant message that I have received is of the importance of direct payments, as essential income support. I have decided, therefore, to prioritise the protection of those payments and have ensured that in no member state will those payments fall by more than 4%. Irish farmers can expect to see no more than a very modest adjustment in their payments.

As I have consistently promised to do, I have also prioritised small and medium-sized farmers by proposing compulsory capping at €60 000, with the savings retained in the member state for redistribution.

In terms of rural development, which provides further essential assistance for Irish farmers, including those in receipt of ANC payments, the Commission has reduced its co-financing contributions by 10%, so it will now be a matter for the Irish Government to make up the shortfall by increasing the level of exchequer co-financing.

In the coming weeks, I will publish the Commission’s legislative proposals for the new CAP, in which we will include specific measures to increase support for young farmers.

The budget has been presented to the member states and the European Parliament, who will ultimately have to agree it. The Member States will, in that regard, have to decide whether they are prepared to increase their contributions.