Farming unions from across the EU have joined forces to demand that national governments match-fund any money that is transferred away from direct payments into the rural development budget.
Union presidents from Scotland, England, Northern Ireland, Wales, Denmark, France, Germany, Finland, Belgium and the Netherlands have signed a joint declaration ahead of the next stage of CAP negotiations.
The final CAP reform package must be agreed by representatives from the European Commission, European Council and European Parliament.
But while EU farm ministers agreed in February that they would like to allow transfers of up to 15% from direct support (Pillar 1) to rural development (Pillar 2) without any obligation on member states to match-fund, MEPs have said they support the co-financing of transfers between the two pillars.
Signing up to the statement, NFU Scotland president Nigel Miller said: “Co-financing is a fundamental part of existing rural development policy. Pillar 2 has always been accompanied by a national co-financing. This ensures only projects that the member states themselves view as important enough to co-finance will be introduced.
“Making it mandatory for national governments to co-finance will reduce the movement of funds from Pillar 1 to Pillar 2 – and thereby also reduce the competitive distortion that could be created between member states.
“If member states are obliged to co-finance the rural developments projects, they are much more likely to ensure that the EU funds – along with the national contribution – are properly managed.”
NFU president Peter Kendall said the free transfer of money from pillar one to pillar two would result in grossly unfair competition between farmers across Europe.
“We could see the UK moving 15 per cent of its pillar one envelope into pillar two while at the same time other member states will be moving money in the other direction,” he said.
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