The European Parliament budget committee has backed an increase to the Common Agricultural Policy (CAP) budget.

This is part of its position on the overall EU Budget for 2021 to 2027.

If implemented the CAP budget would rise from the €336bn proposed by the Commission to €408bn, but would require the contribution from member states to rise from 1.08% of Gross National Income (GNI) to 1.27%.

IFA reaction

“It is highly significant that the parliament has supported the CAP budget being maintained in real terms. This is the first clear acknowledgement at EU level that CAP payments have been eroded by inflation,” IFA president Joe Healy said.

The Multi-Annual Financial Framework (MFF) proposed in May this year included a cut to the CAP budget of 5%.

However, the IFA says that the real impact of this would be a cut of 15%, based on the EU proxy inflation rate.

“This would have a devastating effect on the low-income farming sectors who are very dependent on CAP payments.

“Average farm incomes are 40% of average earnings in other sectors across the EU.

“On cattle rearing and sheep farms, direct payments account for up to 115% of average farm income,” Healy said.