Cereals 2013: DEFRA deal disadvantages UK farmers – NFU

Britain has been allocated the lowest share of rural development funding in Europe following a DEFRA deal that will disadvantage English farmers, the NFU has claimed.

Latest figures from Brussels showed just how bad a deal the UK government had secured for the country’s Pillar 2 rural development programmes, said the union.

The numbers confirmed that the UK would receive the lowest share of funds of all member states on a per hectare basis and would also face significant reductions compared to the current budget. 

Speaking at the Cereals 2013 on Wednesday (12 June), NFU president Peter Kendall will accuse government negotiators of “coming back from Europe with less than we started with”.

“The UK will retain the unenviable position of being allocated the lowest share of all member states on a per hectare basis,” Mr Kendall will tell farmers.

The UK will be allocated €2.293bn (£1.9bn) for the seven year period 2014-2020, according to NFU calculations. This compares to €2.425bn (£2.07bn) for the period 2007-2013 – a cut of 5.45%.

The NFU claims the settlement is equivalent to 22% less over the seven years of the 2014-2020 round of the CAP compared to rolling on the 2013 budget over the same period.

“In the first year of the new programme, we will see our allocation cut by 16%, rising to cuts of 27% in the final year,” Mr Kendall will say.

“By 2020, UK farmers will see less money coming back to the UK than they contributed across into the pot by way of the compulsory EU modulation transfers in 2013,” he will warn.

Deals secured by other countries are rubbing salt into UK wounds, says the NFU. The French secured an extra €1bn, the Italians €1.5bn and Finland an extra €600m, according to NFU figures.

Budget cuts will further disadvantage English farmers through increased voluntary modulation rates from their current levels of 9% up to a maximum of 15%, the union argues.

The government’s determination to shore up budgets by maximising voluntary modulation transfers will further exacerbate differences in payment levels, it claims.

“A Somerset or Shropshire dairy farmer is already disadvantaged to the tune of €235/ha compared to a Dutch dairy farmer,” Mr Kendall will tell listeners.

“I just don’t buy ministers’ arguments that cutting English farmers payments by more than our competitors will leave us in a better position to compete.

“It will leave English farmers more vulnerable to the volatility we have seen in markets and weather over the past few years – and make their businesses less resilient compared to our European competitors.”

A DEFRA spokesperson said: “We want to keep Europe on the path towards a more competitive farming sector, rather than one dependent on subsidies.

“We are fighting hard for a reformed CAP that helps farmers take advantage of new opportunities, improves the environment and gets better value for taxpayers.”


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