EU Budget Proposals as Good as can be Expected

The intended CAP budget, as outlined in the EU Commission’s newly proposed Multi-Annual Financial Framework (MFF), is as good as can be expected, given current economic circumstances, according to NFU Scotland.

The Commission has proposed that the CAP budget remain frozen at the 2013 level - a total of €371.7bn - for a period of seven years, to be spent between 2014 and 2020.  The proportion of the split between Pillars II and I would also remain at €281.8bn and €89.9bn, respectively.

In addition, funds would be made available for research and innovation (€4.5bn), food safety (€2.2bn), a repository for crises, such as the recent E. coli outbreak (€3.5bn), and a ‘European Globalisation Fund’, which would compensate those affected negatively by trade agreements, such as Mercusor (up to €2.5bn).

On the basis of its proposed MFF, the Commission also recorded its intentions for the shape of the next CAP, including narrowing the disparity of payments between Member States; that 30% of direct support should be made conditional on greening; flexibility between Pillars I and II; that more objective criteria should be used to distribute rural development money and that direct support payments to larger farm businesses should be ‘capped’.

Reacting to the EU Commission’s announcement, NFUS President Nigel Miller said:

“Given the perilous state of the global economy and many of the EU’s own Member States, it was too much to expect that the EU Commission might actually propose the CAP budget be increased. It is therefore to be welcomed that up until 2020, funds available to support agriculture in the EU would be more or less the same.

“Crucially, the roles of Pillar I and Pillar II and the split between their budgets would, according to the Commission’s wishes, be maintained. The Commission has long come under pressure to minimise the variation in payments to Member States, and there has to be a compromise between new Member States and net contributors. I think a good balance has been struck in this respect, although Scotland will have to work hard with the Scottish and UK Governments to improve its allocation significantly.

“The prospect of flexibility between the two Pillars is also welcome, although given the diversity of EU farming it is important that the CAP remains a common policy. 

“Alongside securing Scotland’s fair share of the budget there will be other battles to be fought, including ensuring that the ‘greening’ of 30% of direct payments does not lead to a complex administrative system and a situation whereby farmers cannot afford not to comply.

“Proposals to support active farmers only, while along the lines of what NFUS has called for, will have to be worked out very carefully to ensure that part-time farmers and crofters are not unfairly penalised. NFUS will have to continue its close engagement with the EU Commission to develop a payment system which means that the extreme variation of types of farm in Scotland is also reflected.

“The Commission’s insistence that payments to farm businesses above a certain size be capped will have to be extinguished. Scottish and UK farms are, on average, around 8.4 times bigger than farms across the EU-27 and, if capped, could end up being artificially split, leading to more bureaucracy. NFUS believes that capping is, effectively, a tax on efficiency as it could penalise businesses that have grown as a result of the benefits brought about by economies of scale. At a time when farmers are under pressure to produce more food with less of an impact on the environment, penalising efficiency does not make sense.

“Recently, there had been rumours that the rural development budget which makes up Pillar II would be slashed, so it is a relief to see the EU Commission’s commitment to uphold Pillar II payments with a plan to direct money in a more objective fashion. If convergence criteria are effectively negotiated, the effects on Scotland’s Pillar II spend could be good.

“The MFF is by no means fully agreed yet; it must pass muster with the European Parliament and, of overriding importance, be accepted unanimously by the EU Council. Given that Commission President Barroso has thrown down the rebate gauntlet to the UK Government once again, we are likely to have a good deal of negotiation ahead of us yet.”


Contact Sarah Anderson on 0131 472 4108


Date Published:

News Article No.: 122/11

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