Tipperary farm leader questions impact of EU deal on CAP funding

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Tipperary farm leader questions impact of EU deal on CAP funding

Tipperary farm leader questions impact of EU deal on CAP funding

Two of the country's farm organisations have raised concerns about how the EU rescue fund will impact on CAP funding.

The EU this week agreed a €750bn package to stimulate economies following the fallout from Covid-19.

However, Tipperary farmer and IFA president Tim Cullinan said that while a deal was needed, the funding provided for CAP over the next seven years was not consistent with the EU’s aspirations for farming as part of the European Green Deal.

“On the one hand the Commission wants farmers to take costly actions to implement the Farm to Fork and Biodiversity strategies, but on the other hand they don’t want to provide the necessary funding,” he said.

“The overall allocation for CAP is down approximately 9% at constant prices, compared to the previous seven years. The Government will need to come forward with significant co-financing to protect payments,” he said.

“What farmers will want to know is how these figures, together with national co-financing from the Government, will translate into payments at farm level,” he said.

“The Taoiseach now needs to give a clear commitment to all farmers that their payments will at least be maintained in real terms during the transition in 2021/2022 and beyond when the new CAP comes into play,” said Mr Cullinan.

“These talks were difficult with push back from the so-called frugal countries reducing funding for rural development from the recovery fund from €15bn to €7.5bn during the talks,” he said.

“While there is a ringfenced ‘additional allocation’ for Ireland under rural development of €300m, the Government will need to provide significant National co-financing to support these programmes,” he said.

An essential aspect of the outcome is the creation of a €5bn contingency fund for Brexit.

“Depending on the Brexit outcome this may not be sufficient, but it is an important acknowledgement that some sectors and Member States will need aid if there is a poor outcome to the Brexit talks,” he said.

Meanwhile, ICSA president Edmond Phelan has said that the agreement was “necessary to provide economic certainty but it is very hard to see how farmers can do all they are being asked in the context of significantly reduced CAP funding”.

Mr Phelan said that the whole process had been complicated immeasurably by the Covid crisis. The Next Generation EU (NGEU) fund of €750bn, of which €390bn is grant aid, was very necessary to underpin EU economic recovery.

"However, the farming sector is not getting a fair share particularly with the last minute halving of the recovery support for the rural development budget which was meant to be €15bn and is now coming in at €7.5bn," he said.

Mr Phelan welcomed the confirmation of a €5bn Brexit fund which will be targeted at areas particularly impacted by Brexit and it was essential that the Government fought tooth and nail to get a substantial allocation from this given that Irish agriculture is directly in the firing line from Brexit.

“ICSA is disappointed that the overall EU budget of €1,074bn for the period 2021-27 is well down on the initial EU Commission proposals in 2018 for a budget of €1,135bn. Even that figure was a significant cut on the previous budget. The consequence now is that CAP funding will average just under €51bn per annum in constant 2018 prices (or a total of just over €356bn for the seven years) compared with a 2021 budget of €55.2bn. It is inconceivable how farmers are expected to provide so many additional public goods in terms of climate and biodiversity on an ever decreasing funding regime. EU leaders have talked the talk on a Green Deal and the Farm to Fork strategy, but they have not walked the walk on funding it," said Mr Phelan

ICSA believesd that the Government was now going to have to stump up more Exchequer funds if it was serious about the farming sector, as well as being aggressive about getting a fair share of the NGEU fund

The additional fund for rural development will be worth an additional €300m and with Exchequer co-financing this could put an additional €100m per annum into a new REPS scheme. ICSA has already argued that the proposal to put €1.5bn of carbon tax into a REPS type scheme needs to be more ambitious and should be allocated across the period of the Rural Development Programme rather than 10 years as suggested in the programme for government. There is a lot of scope for higher levels of national co-funding of the Rural Development Programme and ICSA will be pushing the new government very hard to deliver on this., he said.

“Overall, the agreement brings clarity to the EU budget and it means that it is now game on to get a CAP reform agreed. Given the decisions made, a lot of creative thinking will be required to protect the interests of Irish cattle and sheep farmers,” said Mr Phelan.