Farming unions have described plans to cut Common Agricultural Policy budgets as ‘realistic’ given the current economic climate.

Under proposals unveiled by the European Commission this week (29 June), budgets available to European agriculture over the 2014-20 funding period will be frozen at €371.7bn.

In real terms, that would result in a fall of about 2% a year, meaning the annual budget for direct payments will gradually decline from €43bn in 2013 down to €38bn in 2020.

NFU Scotland president Nigel Miller said that given the state of the global economy, plans to keep financial support “more or less the same” were welcome.

He praised commission proposals to maintain a split between direct support and cross-compliance budgets, but said plans for “greening” 30% of subsidies should not lead to complex administration.

Proposals to only support active farmers would also have to be worked out carefully to ensure crofters and part-time farmers were not penalised.

“The commission’s insistence that payments to farm businesses above a certain size be capped will have to be extinguished,” he added.

“Scottish and UK farms are, on average, around 8.4 times bigger than farms across the EU-27 and, if capped, could end up being artificially split, leading to more bureaucracy.”

Describing capping as a tax on efficiency, Mr Miller said the measure could penalise businesses that have grown as a result of economies of scale.

“At a time when farmers are under pressure to produce more food with less of an impact on the environment, penalising efficiency does not make sense,” he said.

NFU president Peter Kendall said the cuts were “realistic”, but he was concerned some of the budgets proposals were leading agriculture in “exactly the wrong direction”.

“In particular I am concerned about the suggestion of flexible transfers between the two pillars of the CAP,” he said.

“We want a simpler, more uniform policy which is fair to British farmers, and this has the potential to threaten those objectives.

“I have always said that, whatever the size of the final budget allocation, fair and equitable treatment for British farmers is vital.”