A 5% cut to the Common Agricultural Policy budget was proposed by European Commissioner for Budget and Human Resources Günther Oettinger on Wednesday. In the Multiannual Financial Framework (MFF) proposal, CAP will have a budget of €365bn. This is just under 30% of the €1.279tn MFF for 2021-2027.

CAP retains its two-pillar structure in the proposal, with an increase in national co-financing rates for pillar two.

Direct payments will continue to converge towards the EU average.

“The maximum hit to direct payments in this proposal is 3.9%,” European Commissioner for Agriculture Phil Hogan said, adding that smaller farms will not see a reduction in support. “Savings made by a capping system of €60,000 can be redistributed to small- and medium-sized farmers.”

Listen to Commissioner Hogan in our podcast below:

Member states will have more flexibility to shift funds between direct payments and rural development, in line with national needs and targets.

A new crisis reserve will be created to address issues generated by unforeseeable developments in international markets, or by specific shocks to the agricultural sector as a result of the actions of non-EU countries.

European Commission President Jean Claude Junker said:“The ball is now in the court of the European Parliament and Council and I believe we should aim to have agreement before the European Parliament elections next year.”

First Vice-President of the European Parliament Mairead McGuinness said: “Member states will now have to say if they are willing to tolerate cuts to the CAP and cohesion budgets, and if not they will have to put forward alternative solutions.”

The IFA and ICMSA said the proposal is a significant blow for farmers. IFA president Joe Healy said that the Irish Government, Commissioner Hogan and Irish MEPs must “pull out all the stops and reject the cuts agenda”.

ICMSA president Pat McCormack said it would have a disproportionately damaging effect in rural Ireland.

You can watch EU Commissioner for Agriculture Phil Hogan's opening remarks to the press conference on Wednesday here:

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