EU Budget finalised

The European council has provided for a voluntary capping of Basic Income Support for Sustainability (BISS) payments in Pillar 1 at €100,000.

This is a relatively generous amount, particularly as the European Commission had proposed an €100,000 per farmer limit for all payments, with a progressive reduction in the level of payment after €60,000.

This is a matter that will be finalised in the negotiations that will now begin in a serious way to modify the CAP so that it will drive the Farm to Fork strategy?. Farm to Fork is how the EU has decided agriculture will contribute to the Green ?Deal, the policy under which the EU is committed to be carbon neutral by 2050.

This is from an extra €5.3bn fund that has been created for 15 countries that have either “particular structural challenges in their agriculture sector or which have invested heavily in Pillar II expenditure.”

This is a partial recovery of the cut to the €15bn rural development budget proposed by the Commission and was the starting point for this negotiation.

As with all Pillar II funding, it will be payable only for specific environmental and carbon-reducing schemes which will be submitted as part of Ireland’s national plan for approval by the European Commission and will require matched Government funding.

Although this still has to be developed, if there was to be a REPS-type scheme or an initiative to reduce production of livestock, this fund could be used for these or similar initiatives.

This is the process of levelling payments received by farmers in the countries that joined the EU last with original members, and will continue during this budget period.

All countries that have direct payments per hectare below 90% of the EU average will close half of the gap between their current average direct payments and 90% of the EU average and achieve a minimum payment of €200 per hectare in 2022, rising to a minimum of €215 per hectare in 2027. This will be taken from countries where farmers receive above average payments.

However, as Ireland is at around 90% of the average, this will have no impact on Irish payments.

Pillar I CAP payments are the standard EU financial support for farmers and will be known in the next CAP as the Basic Income Sustainable Support (BISS). This is funded entirely by the EU budget.

Pillar II won’t be an automatic add-on to Pillar I payments but is a fund to which farmers can apply for what is described as “specific environmental and climate public goods”. Pillar II will be co-financed by the EU and national governments.

Governments have the flexibility to move up to 25% of funds either way between pillars, with an additional 2% allowed to transfer from Pillar I to Pillar II for the support of young farmers.