Last week’s EU Summit on the 7-year EU budget ended without an agreement with more time needed before a deal will be reached.   

The EU leaders failed to broker a consensus on the so called Multi-Annual Financial Framework (2021-2027) following two days of debate.

Disagreement continues between those countries wishing to limit overall EU spending to 1% of GNI (including Germany, the Netherlands, Denmark, Sweden and Austria), and countries wishing to see a more ambitious budget, which closes the gaping hole left in the EU budget (up to €75 billion) due to the UK’s departure.

EU member states are further divided on how the money should be allocated. There is a group of countries calling for more spending on new priorities such as defence and migration (particularly the five listed above), with other countries seeking to protect cohesion funding for regional development (mainly Eastern and Southern countries) and a third cohort of countries seeking to protect CAP funding (largely led by France and Ireland).

As outlined in the graph below, which charts the progression of the budget discussions, the current, unagreed proposal following last week’s debate between EU leaders, seeks a CAP budget of €333.4 billion, which represents a cut of close to €50 billion on current levels.

This includes a cut of €27 billion (- 9.4%) to Pillar 1 (Direct Payments), and €20.6 (-21.4%) to Pillar 2 (Rural Development).

As evidenced by the recent protests by beef farmers in Ireland and many more from across different sectors all around the EU, farmers are struggling. Direct Payments provide a central support to farmers managing today’s difficult market situation. For 60% of Irish farmers, their direct payment represents over 100% of their farm income.

The proposed cut of 9.4% to direct payments represents an intractable barrier to generation renewal. We must ask, at the end of this budget period in 7 years’ time, who do we want producing our food and is food security a priority of the EU?

Equally the proposed cut of 21.4% to rural development funding is unaligned with Ireland and the EU’s ambition around climate action and biodiversity protection.

The Rural Development Programme is the key tool by which farmers are addressing these challenges, enabling them to invest in sustainable practices and production, that would otherwise not be possible.

Cutting funding leaves farmers, who are central actors for carbon sequestration and the local managers of our natural habitat, without the means to act on the ambitions we all share to achieve carbon neutrality, enhance biodiversity and protect animal welfare. If we truly believe in these ideals, we need to be able to commit the resources to achieving them.

The next European Summit is scheduled to take place in Brussels on 26^th to 27^th March. However, an earlier meeting is a possibility to hammer out a deal.

It is vital that Irish politicians in the middle of Government formation stand behind the pledges they have made to ensure that the CAP budget is at least maintained at current levels, for the sake not just of farmers, but for consumers, for our rural communities and for our planet.

Alison Graham – European Affairs Executive