The protests in Dublin and Brussels this week by IFA, ICOS and the European Agricultural organisations COPA COGECA serve to highlight the importance of EU funding to farming, food and rural development across Ireland and Europe.

The protests have been sparked by increasing discussion at EU level that a change in the structure of the next CAP is on the way.

Readers might correctly point out the next CAP is not going to kick in until post 2027. However, the key financial planning proposals for the next CAP happen over the next two months.

When I spoke to IFA president Francie Gorman late on Tuesday night from Brussels, he was happy that the Brussels and Dublin demonstrations clearly highlighted that if CAP funding was not ring-fenced, then it was a threat to farming in rural Ireland.

Standing back from the detail of the new CAP, it is easy to see the backdrop to the current discussions at EU level are surrounded in geopolitical tension, trade wars and increased anxiety of EU countries about security and defence.

EU food security and increased environmental ambitions don’t rate against these huge global challenges.

The mood at a European level is that the current funding structure and allocation is too unwieldy and makes it hard for the EU to react to different crises.

When Ursula von der Leyen appointed Piotr Serafin as Commissioner for Budget and Administration, one of his core tasks was to move to a performance from a policy-based budget.

What next?

Those walking the halls of power in Brussels, listening and talking to Serafin seem to suggest that the concept of “direct payments”, is recognised as relatively secure.

When I spoke to IFA’s Liam MacHale, he suggested that the Pillar 1 pot that we know nowadays as BISS, Ecoscheme, CRISS etc is understood as critical to the production of quality food.

However, the Pillar 2 funding (rural development, Leader funding, ANC, ACRES, TAMS etc), which accounts for about 25% of our current CAP funding, might be structured differently in the next CAP and move more towards a cohesion funding model.

Currently the Cohesion Fund finances programmes with shared responsibility between the European Commission and authorities in member states.

The member states’ administrations choose which projects to finance and take responsibility for day-to-day management.

If this move happens as anticipated, then this Pillar 2 pot of funding for rural development could come under more competition from other member state priorities such as housing, social welfare etc.

If a single fund is created, rather than specific allocations to programmes (eg a suckler cow scheme), a member state has more of a say over funding.

Key to this will be the national strategic plan, and member states will need to deliver on a plan with money delivered on policy milestones reached.

This gives member states more control, but also gives the EU more control over the purse strings, because if a member state doesn’t reach milestones, the funds are not transferred.

So what happens next? The officials in DG Agri are burning the midnight oil right now to get the text of this proposed new structure written up.

There is currently little or no communication between DG Agri officials and stakeholders as they strive to write the plan down.

This will mean the proper time allocation to discuss and evaluate will be limited if the CAP proposal is to be announced on 16 July.

Sign-off

Who decides on the sign-off of the CAP? Ultimately, member state prime ministers decide on the member state contribution and budget overall.

Ursula von der Leyen’s party, the European People’s Party (EPP) has stated they want Pillar 1 and 2 funding ring-fenced, however, von der Leyen seems intent on pressurising for this structural change to happen now.

Parliament could well influence but won’t have a say.

The twist in the CAP narrative is real. The Commission was being lobbied for extra funding for CAP and the environment – it has now turned to a situation where the CAP will be lucky to hold what it has.

The foundations of the near €4 billion Pillar 2 fund are being rocked. The continued decline where CAP funding was over 50% of the total funding in the early 70s to less than 25% currently looks set to continue.