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CAP spending faces further €5 billion cut

Feb 18, 2020 | News

(18 February 2020) – In the latest compromise proposal for the next EU 7-year spending plan, fresh money allocated to the European Agricultural Fund for Rural Development (EAFRD) was trimmed by €7.5 billion.

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On 14 February, European Council President Charles Michel proposed a slight increase in the overall size of the Multiannual Financial Framework (MFF) from 1.067% to 1.074% of EU27 gross national income (GNI) compared to the Finnish presidency proposal, resulting in a new expenditure ceiling of €1,094 billion.

In this last draft budget, the money allocated under the heading ‘natural resources and environment’ amounts to €354.1 billion, and includes also CAP’s twin fund for fisheries, namely the European Maritime and Fisheries Fund (EMFF), but also the climate action program LIFE.

In Michel’s proposal, the budget allocation for the CAP’s first pillar (direct payments to farmers) is €256.7 billion in constant 2018 prices, with a €2.5 billion increase compared to the amount earmarked in both Commission’s CAP proposal presented in June 2018 and the Finnish presidency’s negotiating toolbox.

However, the fresh money devoted to CAP’s second pillar (rural development) is proposed to be set at €72.5 billion, which is €7.5 billion less than the Finnish proposal, resulting in an overall €5 billion cut. Such a decrease also frustrates the efforts of the Finnish presidency to allocate €10 billion more to the rural development funds. In the Commission’s proposal, rural development aid fell by 28% compared to the 2014-2020 CAP budget, whereas the first pillar only decreased by 11%.

Michel’s negotiating box also presents a relevant change ensuring more flexibility in the transfer between CAP’s two pillars. The percentage for shifting up direct payments under the first pillar to rural development programmes in the second pillar is proposed to be increased to 20%, from 15% in both the Finnish presidency and the Commission draft proposals. Also, the maximum rates of EU co-financing for rural development programmes have been increased from 70 to 75%, but only for Europe’s less developed regions. (EurActiv)

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