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EU to cap farm payments - but supporting incomes remains top priority

Protecting food security and supporting farm incomes remain top priorities for the EU, despite a leaked document revealing plans to cap farm payments at €60,000 in the next round of reforms.

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EU to cap farm payments, but supporting incomes remains top priority

Capping direct payments at €60,000 would be a big step for the bloc, which currently allows member states to cap payments at the much higher rate of €150,000 if they wish.

 

The document suggests member states should spend the money saved through the cap on support for smaller and medium-sized farms, or other rural development projects.

 

EU Budget Commissioner Gunther Oettinger hinted at the planned changes in comments to European news service Politico last week.


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He said: “We cannot fully exempt the existing programmes from cutbacks. What we have in mind is degressive funding. That means a very big business receives for its hectares a little bit less money than a small enterprise.”

 

A ceiling of €60,000, or £53,000, is significantly lower than the £100,000 initial cap Defra has proposed for UK farmers in its farming policy consultation.

 

Though the policy would be likely to garner public support, countries such as Czechoslovakia would be disproportionately affected because old large-scale communist co-operatives and state enterprises have been converted into big, private farms.

 

Despite the capping proposals, supporting farm incomes to protect food security is set out as the number one objective of the Common Agricultural Policy (CAP) in the document.

 

This is in stark contrast to the UK Government’s post-Brexit farming plans, which have been heavily criticised for failing to consider food security.

Other future EU priorities include increasing competitiveness, improving farmers’ position in the value chain, contributing to climate change mitigation, preserving landscapes and attracting new entrants.

 

To bring new blood into the industry, the paper proposes giving member states the power to provide lump sum payments of up to €100,000 to farmers under 40 setting up new businesses.

 

Plans to task member states with targeting payments at ‘genuine farmers’ were also set out in the document.

 

People whose agricultural activity forms ‘an insignificant part of their overall economic activities or whose principal business activity is not agricultural’ would be denied support in future if the plans are approved.

Other proposals in the document

  • Member states will be required to draw up national CAP support plans which protect food security; bolster environmental care and strengthen the socio-economic fabric of rural areas
  • A new Managing Authority and Monitoring Committee will monitor implementation of those support plans by establishing a series of milestones and targets
  • Member states will be forced to submit annual performance reports on their support plans every year from 2023
  • Agri-environment-climate commitments in the CAP will be compulsory for member states, but farmers will only be compensated for costs incurred and income foregone
  • Member states may grant support for risk management tools, such as financial contributions to premiums for insurance schemes or financial contributions to mutual funds
  • Member states must establish national ‘CAP Networks’ to increase the involvement of stakeholders in the design of CAP support plans and facilitate peer-to-peer learning
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