The NFU has dismissed the EU budget deal as bad news, claiming that it could severely disadvantage Britain’s farmers.

It claims that a key point of concern is a reduction in Rural Development funds for the original 15 EU member states.

Final decisions will be made in February or March concerning the precise allocation to each country but NFU calculations indicate a potential shortfall of €40m per year compared to the current financial arrangement. 

Another concerns is that the Brussels ceiling on Pillar I (direct payments to farmers) will be respected, but will include Romania and Bulgaria and therefore result in a potential decrease in SPS (Single Payment Scheme) payments in the region of 7-8%.

As feared, the voluntary national modulation of up to 20% has also been approved and there is no requirement for this modulation to be match-funded. 

The NFU sees this deal as re-nationalising part of the CAP and it carries a serious risk of placing farmers at a competitive disadvantage to their European counterparts. 

NFU president Tim Bennett said: “Protecting CAP Pillar 1 and shifting the downward budgetary adjustments to Pillar 2, but allowing voluntary modulation of up to 20% has huge competitive disadvantages for England and Wales. 

“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. 

“This puts English farms at a real disadvantage.  If the government chooses not to co-finance, the problem will be doubled.

“This deal will lead to inequality between Europe’s farmers and make it almost impossible for my members to remain competitive.  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. 

“It would be ironic and disgraceful if French farmers were to gain a competitive advantage from a deal brokered by the British Prime Minister.”