Significant cuts in rural development spending over the next seven years are looking increasingly likely under new EU budget proposals tabled by the UK presidency in Brussels this week.

The plans, drawn up by Prime Minister Tony Blair, put spending on the so-called Pillar 2 supports at 69bn (47bn) over the next seven years.

This is 5bn (3.4bn) less than the amount proposed at Luxembourg last summer, and fully 20bn (13.6bn) less than originally suggested by the EU Commission.

The massive reduction appears to be in stark contrast to comments from the UK Treasury and DEFRA last week, calling for rural development funding to be stepped up as part of their “vision” for the CAP (see p6).

“Maybe there is method to their madness, but it seems that, while Gordon Brown is talking about putting money into Pillar 2 rather than Pillar 1, Tony Blair wants to cut the budget for rural development,” said NFU president Tim Bennett.

In fact, the UK budget proposal also calls for voluntary modulation of up to 20%, to enable member states to cut single farm payments and transfer the money to rural development.

But, unlike the current arrangements, there would be no obligation on governments to match-fund.

“This would be really bad news for British farming,” warned Mr Bennett.

“We are on target for 10% modulation in the UK anyway, match-funded by government.

If Mr Blair gets this through, we could have modulation at 20%, with government dropping its share.”

Such an approach would also lead to massive discrimination, with countries such as France likely to keep all their 20% in the form of direct payments to farmers.

Environmental groups have also expressed grave concern at the level of cuts to rural development being talked about.

“We don’t see any justification,” said head of agricultural policy at the Royal Society for the Protection of Birds, Sue Armstrong-Brown.

“This runs the risk of reversing all the public benefits that have come from CAP reform.”

The RSPB welcomed the idea of moving 20% of funds from Pillar 1 to Pillar 2.

“But we can’t imagine many member states will take it up if it’s optional,” she said.

“If we get the cuts without a compulsory transfer, there will be an outcry.”

philip.clarke@rbi.co.uk