The Commission is proposing that funding for the Common Agricultural Policy (CAP) is “moderately reduced” by around 5%, EU Budget Commissioner Gunther Oettinger said on Wednesday. He added that the cut is “to reflect the new reality of a Union at 27".

Listen to further explanations by European Commissioner for Agriculture Phil Hogan in our podcast below:

In financial terms, CAP will have a budget of €365bn, retaining two pillars. This means it drops to under 30% of the overall €1.3tn budget. For pillar II, the Commission proposes to increase national co-financing rates. Natural resources and the environment make up €378.9bn of the budget.

CAP will be modernised to ensure it can “still deliver with less and even serve new priorities”. The Commission has proposed that direct payment levels per hectare between member states will be “streamlined and better targeted. They will continue to converge towards the EU average. A stronger focus will be put on supporting small and medium-sized farms”.

Member states will be given more responsibility for making the best use of the agriculture budget. They will have more flexibility than today 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.

The Commission says that agriculture will benefit from other parts of the overall financial framework, namely the fact that at least 25% of EU expenditure across all EU programmes should contribute to climate objectives. Horizon Europe will support €10b-worth of research and innovation in food, agriculture, rural development and the bio-economy. LIFE, which has funded farm-orientated programmes such as the Burren and the Aran Islands, will also support measures promoting energy efficiency and clean energy. Meanwhile, funding under the space programme is expected to help make precision farming a reality.

Reaction

The proposal is a big blow for Irish farmers, IFA president Joe Healy said.

“It is clear that the Commission has moved to fill the Brexit gap, but it has prioritised other areas at the expense of CAP, which is another setback for Irish farmers on foot of the UK decision to leave."

He added that there is a huge task ahead of the Irish Government, the Commissioner for Agriculture Phil Hogan and Irish MEPs to get an increase in the CAP budget.

“They must pull out all the stops and reject the cuts agenda by the Commission,” he said. “All sectors have shared in the economic revival, yet farmers have had their direct payments eroded by inflation. At the very least, farmers need a CAP increase in line with inflation”.

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