Welsh farm leaders have reacted with relief to the CAP reform agreement, but warned that if the Welsh government takes up the option to move money from Pillar 1 to Pillar 2 it will hit farmers hard.

NFU Cymru president Ed Bailey said the deal gives Wales the framework to allow for the implementation of a scheme that can continue to support Welsh farmers in producing food to world-leading standards.

But he warned farmers that significant changes to the total CAP budget, plus moves such as making support for young farmers a compulsory element of Pillar 1 funding “could have a potentially major effect on the level of support for individual farming business going forward”.

Mr Bailey said overall the agreement was a positive move forward from the original CAP proposals published by the European Commission in October 2011.

“Of key concern to Welsh farmers is the move away from the historic model for basic payments to an area-based approach, ” he said. “This week’s lobbying has secured proposals that allow for safeguards to be put in place to limit the losses for farmers in the move to the new system, alongside measures that allow for a more phased and managed transition period.

“We now need the Welsh government to build upon the modelling work already completed to determine whether these revisions can be used to help further minimise the redistribution between farming businesses, sectors and regions of Wales in the move across to the new scheme.”

Mr Bailey said the union still disagreed with the idea of greening within Pillar 1, but the final agreement gave greater recognition to countries such as Wales who it is felt have farming systems that are already “green by definition”.

“The agreement allows for changes in permanent pasture levels to be monitored at “Welsh level” rather than “farm level” – this will be simpler for the Welsh government to implement and will also allow farmers to amend their production systems to respond to market drivers.

“Similarly, exemption from other elements of the greening rules for predominantly grassland farms makes greening more manageable for many farming businesses in Wales,” said Mr Bailey.

Farmers Union of Wales (FUW) policy director Nick Fenwick said he couldn’t make a final assessment until he had seen the final deal. However, there looked to be some positive stuff in the deal, but also some negatives.

If you took the commission’s original proposals as a baseline there had been positive moves in favour of the farming community when it came to greening, he said.

However, the decision about coupling was a “massive own goal” because by agreeing to a two-tier system, the UK had moved away from being part of a common policy, he said. “It is not that we agree with coupling, but what country negotiates away the right to the flexibility [to implement coupling at the same levels as other countries]?”

Mr Fenwick said the FUW would be watching closely whether the final text included compulsory match-funding for any money moved from Pillar 1 to Pillar 2. “Co-financing acts as a dissentive to use voluntary modulation. We have a real fear if there is not compulsory co-financing.”

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