MercoPress. South Atlantic News Agency

EU farm budget frozen for next seven years and conditioned to ‘greening’

Direct payment to EU farmers and market support has been allocated €281.8bn

The European Union has published its long-awaited budget, which will see spending on the Common Agricultural Policy (CAP) frozen for the next seven years and make 30% of direct support conditional on ‘greening’.

The report (Multi-annual Financial Framework) stated that farmers must engage in environmentally supportive practices, which will be defined in legislation and will be verifiable.

It also promised convergence of payment, adjusting progressively the levels of direct support per hectare. Member states with direct payments below 90% of the average will close one-third of the gap between their current level and this level.

Rural development funds will be reviewed and better targeted to ensure fairer treatment of farmers performing the same activities, while proposals will be made to permit flexibility between the two pillars.

The level of direct payments will also be capped by limiting the basic layer of direct income support that large agricultural holding may receive.

Although the EU has increased its budget by 5% for the period 2014-2020, the current CAP level will stay at €371.7bn, shrinking the total proportion spent on agriculture by over 3%, to 36.2%.

The Commission has allocated €281.8bn for pillar I payments (direct payments and market support) with €89.9bn allocated for rural development, the environment and innovation.

A further €15.2bn of spending was announced, which includes €4.5bn for research and innovation on food security, the bio-economy and sustainable agriculture, €2.2bn for food safety and €2.5bn for food support.

A new reserve of €3.5bn will be created for crises in the agriculture sector, and up to €2.5bn used to extend the scope of the European Globalisation Fund, which acts as compensation for negative impacts of global trade agreements.

The report said that the changes propose are “designed to lead to a fairer and more equitable system of support across the EU, linking agriculture and environment policy in the sustainable stewardship of the countryside and ensuring that agriculture continues to contribute to a vibrant rural economy”.

“This is a good result for the future CAP in today’s economic climate,” said Agriculture Commissioner Dacian Ciolos, commenting on the MFF proposal adopted by the Commission. “It is a budget that will enable us to carry out a major reform of the CAP,” he added.

“This document already outlines certain aspects of the reform, such as ‘greening’, upper limits, farmers engaged in agricultural activity, fairer allocation of payments, a scheme for small-scale farmers and a results-based rural development program.”

Freezing agricultural spending at 2013 levels until 2020 was reached after strong resistance to reduce costs and fund new EU priorities such as climate change. Britain, Sweden and others had called for deep cuts to CAP budget after 2013, but a majority of EU governments led by France wanted farm spending to remain at least stable after the policy is reformed in 2014.