Rural development budget in peril

The President of the European Council, Herman Van Rompuy, has issued a new negotiating text for the forthcoming MFF in preparation for the forthcoming Council meeting. He proposes further cuts of €75 billion to the Commission proposals, exceeding those recently tabled by the Cypriot Presidency (€50 billion). The implications for rural development are serious.

Whereas the Cypriot Presidency proposed cuts to the CAP budget for the period of 3.2 per cent for direct payments and 1.3 per cent for rural development, the latest proposals would mean a 9 per cent cut for the rural development budget, and 5.8 per cent cut for direct payments and the market crises reserve. This would mean a reduced share of €83.666 billion (in 2011 prices) as opposed to the Cypriot proposal of €90.816 billion for rural development.

The latest proposals would mean a 9 per cent cut for the rural development budget, meaning a reduced share of €83.666 billion (in 2011 prices).

The cuts to the CAP budget are being met with strong opposition from Spain, Italy, Austria, Ireland and France. The French European affairs minister, Bernard Cazeneuve, told the French parliament ‘We do not accept the proposal to reduce by €25 billion the money for the Common Agricultural Policy, which we consider a policy for growth’.

This development creates real concern for the rural development budget, the target of many such political attacks in the past. Under the Council proposals, Member States would have the option for reverse transfers of 15 per cent of Pillar 2 funds to Pillar 1 which could further undermine the already weakened Pillar 2 budget in some countries. More positively for rural development the proposals also include provisions for 15 per cent transfers from Pillar 1 to Pillar 2, without the possibility of co-financing, which will appeal to some Member States.

Meanwhile, certain Member States, largely the net contributors, are calling for greater cuts, than Van Rompuy’s arguing that reduced agricultural subsidies are an absolute must for the forthcoming programming period (SE, UK, NL and DE). However, in arguing this line, there appears to be little interest in the implications for rural development.

Moreover, there is a somewhat alarming indication that the Council will also seek to the design of the greening measures in Pillar 1. Van Rompuy is contending that if the 30 per cent for greening is to remain, ‘clearly defined flexibility for Member States relating to the choice of greening measures’ is needed.

Reactions from the Agriculture Commissioner, Dacian Cioloș, urge the Council to consider the impact of such cuts on farmers, claiming that the Council proposals, if accepted, would take the CAP back 30 years.

Cioloș: if accepted, these proposals would take the CAP back 30 years.

Next steps: A summit has been called for EU leaders to discuss the MFF for 2014-2020 on 22-23 November. However, with strong divisions between Member States, it is uncertain that an agreement is possible .

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15 Nov 2012