13 Mar 2017
Brexit’s Budget Implications Slows Down CAP Discussions
EU Agricultural Ministers met on Monday, 6th March, for a first exchange of views on the future Common Agriculture Policy (CAP). In a discussion together with EU Agriculture Commissioner, Phil Hogan, the delegations underlined that further simplification and improved risk management and market crisis tools were top priorities in the reform.
Irish Agriculture Minister, Michael Creed stressed in the meeting “the importance of ensuring that the CAP continues to evolve in the way that it has over recent reforms, and that it supports the achievement of European strategic objectives. This will help to reinforce the relevance and effectiveness of the policy, and to secure a strong CAP budget for the period post-2020.”
“A strong CAP budget” was the dominate issue within the discussions, with the implications of Brexit looming large over the debate. With the loss of the UK’s net contribution, there will be on average a €10 billion annual black hole in the EU budget and member states will need to decide whether to increase their own contributions to fill in this gap or to significantly cut EU spending. An increase would mean the largest donors, Germany and France, would be required to pay even more, while countries such as Ireland and Spain would shift from being net beneficiaries to net contributors. However, spending cuts, would likely have a large impact for the CAP budget, which makes up approximately 40% of the EU’s overall spending. This will be sure to have a knock on effect for direct payments and rural development subsidies, as well as the fact that without knowing how much money there is to spend, member states are unable to form a firm opinion on the future CAP design.
ICOS, together with other co-operative and farm organisations are calling for member states to maintain the CAP budget and defend against any reductions, which would have a particularly damaging impact on the farming and rural community at this time, in light of the uncertain market situation we are also facing.
Minister Creed, also used the occasion to discuss these market implications of Brexit with other Member States, including the current and future holders of the Council Presidency, Malta and Estonia, as well as Spain, Scotland and Commissioner Hogan, pushing for support for an outcome that is as close as possible to the status quo.
By Alison Graham
European Affairs Executive