INDUSTRY LEADERS have told farmers to prepare for a watershed year as sweeping CAP reforms take effect in 2005.

But some are already warning that the CAP budget will not stand the financial strain placed on it by the reform‘s environmental and rural development schemes.

The emphasis on the environment and rural development is forecast to increase beyond 2012 when the next set of reforms is to be put in place.

“But it may be well before 2012 that we get the crunch,” Martin Haworth, the NFU‘s policy director, told FARMERS WEEKLY.

“Already in a few years‘ time there will be a lot of pressure on the system,” he said, citing a number of internal CAP reviews and the prospect of a World Trade Organisation agreement next year as contributing factors.

“The budget may run out as soon as 2007 or 2008. The new member states‘ payments will gradually be increasing, and it is very likely that the agreed ceiling will be hit.”

He added that there is a possibility that such an event would trigger a review of the whole system.

“Maybe everyone will be happy with cutting the payments, but maybe people will say there‘s a need for a new look at the reforms,” Mr Haworth said.