Grain

    CAP update

    The EU budget, subsidy rates and cross compliance reminders


    EU BUDGET

    While the Tory rebellion over EU expenditure has publicly forced David Cameron to support a cut in the EU budget other countries had already started to build alliances to this end. Two significant papers were produced constructing a framework for agreement. The first was produced by the Cyprus Presidency of the Council (the organisation representing the members states) for presentation to COREPER (COREPER prepares the agenda for the ministerial Council meetings).

    The second paper was produced by Herman Van Rompuy the President of the European Council and chairman at meetings between the member state heads, for consideration at the General Affairs Council on 20 November.  The paper builds on the Cyprus Presidency paper.  A further modification is expected before the full Council meeting.

    Both papers reduce the budget against the Commission proposal with the CAP budget hit fairly hard with a slightly greater cut for pillar 2 (rural development) than pillar one (direct payments and support). 

    The only area where expenditure is increased is heading 1 a ‘Competitiveness for growth and jobs‘ which is concerned with amongst other things research and development.

    The EU budget is defined in terms of percentage of Gross Net Income (GNI) and hovers a little over 1%.  Germany  is arguing for a reduction to 1%.  The division of member states is fairly predictable with most of the net contributors arguing for a reduction in the budget while the net recipients are arguing for an increase.  France, as a net contributor, is alone in asking for an increase.

    The main opposition to a reduction in expenditure is the MEPs.  While ultimately this body has no direct power over the budget it can drag its feet on other issues such as the CAP agreement.  The move by the Tory MEPs into a fringe group within the EU parliament, from the dominant centre right grouping, has further weakened influence.

    One of the minor asides in the Van Rompuy paper was the suggestion that the proposal to cap payments to larger farmers should be made optional at member state level.  The absence of a stronger debate on this proposal has been one of the surprises of the negotiations to date.

    Subsidy rates: Single Payment Scheme 2012 rate

    Exchange rate €1=0.79805

    View the SPS Subsidy rates for 2012

    There are no pulse or energy payments.
    The euro rates are expected to roll forward into 2013 and in all probability 2014.


    Cross compliance reminders
    IRRIGATION: Irrigation usage returns for summer extraction should be returned to the Environment Agency by the end of November.
    SOIL PROTECTION REVIEW: The Soil Protection Review should be updated on  1 January.  The difficult conditions this year might mean that extra changes are worthwhile.

     
     

    Key contacts

    Andrew Wraith

    Andrew Wraith

    Director
    Food & Farming

    Savills Lincoln

    +44 (0) 1522 508 973

    +44 (0) 1522 508 973

     

    Steve Hollis

    Steve Hollis

    Director
    Food & Farming

    Savills Salisbury

    +44 (0) 1722 426 853

    +44 (0) 1722 426 853

     

    Keith Preston

    Keith Preston

    Director
    Food & Farming

    Savills Oxford

    +44 (0) 1865 269 170

    +44 (0) 1865 269 170

     

    Ashley Lilley

    Ashley Lilley

    Director
    Food & Farming

    Savills Cheltenham

    +44 (0) 1242 548 012

    +44 (0) 1242 548 012

     

    Giles Hanglin

    Giles Hanglin

    Director
    Rural Research

    Savills Margaret Street

    +44 (0) 207 016 3786

    +44 (0) 207 016 3786