EU budget will damage UK interests, says NFU
settlement could damage the nation's food production.
NFU president Tim Bennett, who is currently addressing the Oxford Farming Conference, argues that government is wrong to call for more radical reform of the EU common agricultural policy (CAP) as farmers are just beginning to learn how to manage the reforms agreed in 2003.
Last year saw the biggest changes in the CAP's history pushed through. These included the "decoupling" of subsidies farmers receive for the amount of food they produce.
This has led to a single payment for each farm, instead of a variety of subsidies for different crops.
Final decisions will be made in February or March concerning the precise allocation to each country, but the NFU says that current predictions indicate a potential shortfall of €40 million per year compared to the current financial arrangement.
"This deal will lead to inequality between Europe's farmers and make it almost impossible for my members to remain competitive," said NFU president Tim Bennett.
"The government has previously assured us that farmers will not lose out because of the negotiations so we will be pressing the Prime Minister, the Treasury and Defra to agree to match funding."
The NFU believes that the inclusion of Romania and Bulgaria in direct payments to farmers will result in a potential decrease in SPS (Single Payment Scheme) payments in the region of seven to eight per cent.
In addition, the approval of voluntary national modulation of up to 20 per cent means that there is no requirement for this modulation to be match funded. The NFU sees this deal as re-nationalising part of the CAP, and carries with it a serious risk of placing farmers at a competitive disadvantage to their European counterparts.
"Protecting CAP Pillar 1 and shifting the downward budgetary adjustments to Pillar 2, but allowing voluntary modulation of up to 20 per cent has huge competitive disadvantages for England and Wales," said Bennett.
"It means that member states with adequate Pillar 2 core funding, who are also committed to maintaining Pillar 1 (this includes France and Ireland) will not modulate; while in England and Wales we will face massive modulation to maintain commitments to agri-environment schemes.
"It would be ironic and disgraceful if French farmers were to gain a competitive advantage from a deal brokered by the British Prime Minister."
However it is likely that minister for food and farming Lord Bach will continue to press for further CAP reforms at this week's conference.