Hogan warns of cuts to CAP farm budget due to €12bn Brexit shortfall

European commissioner for agriculture Phil Hogan has warned that the €12 billion "hole in the overall European budget" caused by Brexit is likely to impact on Irish farmers through cuts in EU-wide agriculture funding.

Mr Hogan said the Common Agriculture Policy (CAP), which is crucial to farmers’ income channels through direct payments and market supports, is viewed as an “obvious target for cuts” in many quarters of the EU.

The commissioner was speaking in Kilkenny at an IFA/European Commission citizens' dialogue meeting attended by over 500 farmers and farmer representatives, where one of the main topics of conversation was the upcoming review of CAP.

“Brexit is blowing a €12 billion hole in the European budget, and other priorities such as security, migration and defence have grown in prominence in recent years.”

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The meeting heard that a recent European Commission discussion document provided three budget options for the CAP: a 15 per cent cut, 30per cent cut, or no change.

All EU states have to agree to an increase in contributions to the EU budget just to make up the expected Brexit shortfall, Mr Hogan said. At the moment 21 of the 27 have agreed such a policy. “The problem is there has to be unanimity... If we don’t have the money there will be a cut in the budget. The challenge is to convince the other five or six member states.”

However, IFA president Joe Healy said that farmers in Ireland and other countries which are strong supporters of the EU should not be punished by the UK's decision to leave the EU.

“There has to be some regard and some reward for supporting the EU, and there has to be some recognition of European solidarity,” he said to applause from the gathering in the O’Loughlin Gaels GAA clubhouse on Friday night.

All EU citizens

Addressing Mr Hogan, he said: "You and your colleagues cannot allow a situation where the EU farmers are worse off because the United Kingdom decided to leave the EU. What sort of signal would that send out about the future of the EU project?"

Farmers, and the EU at large, needed an increase in budget and not a decrease or the status quo. “To those who say CAP is only for farmers, I say it’s a policy for all EU citizens, facilitated by farmers. The original idea for CAP was to provide farmers with a fair standard of living, in return they produce a sustainable supply of safe, high-quality food for consumers at affordable prices.”

At the moment member states contribute 1 per cent of their gross national income into the EU budget, but moves are afoot to raise this to 1.3 per cent, with 21 of the 27 countries remaining after Brexit already in agreement.

“The commission must get the rest on board,” Mr Healy said, adding that a rise in the overall EU budget should lead to a rise in the CAP budget.

“We need to see a greater slice of the consumer euro going to the farmer. At the moment it’s about 21 cents in the euro, compared to the retailers’ 51 cents in the euro.”

In reply Mr Hogan said: “As the figures stand at the moment, and in the absence of more money, there is no chance we’re going to get an increase...What we’re looking for at the moment is that we hold what we have.”

Earlier, Philip Tallon of Dawn Meats said that Brexit was "a step into the unknown" and farmers do not know what lies ahead as a result of the UK withdrawal, with a particular "threat" to those who export into the UK.

Opportunities

Mr Hogan told reporters that there was a “very difficult budget situation” at the moment because of the €12 billion cost of Brexit. “My objective would be to maximise the opportunities to protect as much as possible the income of the small and medium farmers.”

The UK government “seem to have not come to terms with the fact yet that they have to agree what they signed up to in the December report, that there should be a frictionless border”. The “intensive work” that has gone on in negotiations had “not yielded any results”.

However, Brexit was still likely to happen. "The government party of the Conservatives and the Labour Party in opposition seem to be on the same wavelength – that they need a Brexit. We need to see the softest possible Brexit."

Meanwhile, Mr Hogan said that with Irish ammonia emissions in 2016 in breach of EU limits for the first time, Ireland “can’t afford to pay lip service to the climate and environment any more,” or we risk “serious fines” from the commission “if we continue on our current path”.