Ireland

Key elements of CAP reform deal

REUTERS

Thu Jun 26 2003 - 01:00

BUDGET

  • Expenditure to remain within the nearly €40 billion-a-year ceiling set under previous (1999) reform until 2006, rising to €45 billion in 2007 and hitting €48.5 billion by 2013, to take account of inflation.

NEW FORMS OF SUBSIDY

  • The introduction of new types of subsidies, divorced from output, whereby farmers can still receive money from Brussels irrespective of what they produce.
  • Farmers will have to meet strict environmental, animal welfare and farm safety standards before receiving payments.
  • Introduction of a single farm payment based on amount of subsidies a farmer received in 2000-2002 period.
  • Member states can start the scheme in 2005 or delay it until 2007.

CEREALS SECTOR

  • Seventy-five percent of cereals payments will be divorced from production with 25 per cent remaining linked to the quantity of cereals produced.
  • Alternatively, member states can decide to end production-related subsidies for 60 per cent of durum wheat aid with 40 per cent aid remaining tied to durum wheat output.
  • Member states can also opt for a total break of the production-subsidy link.

LIVESTOCK SECTOR

  • There are a variety of options in the livestock sector for ending production-related subsidies on a partial basis.
  • They are based on specific subsidies for different types of animal production - for example, beef or sheep.
  • Member states also have the option to go for a total break between production and subsidies.

DEVELOPING THE COUNTRYSIDE

  • Farmers receiving over €5,000 in direct aid will have the subsidy reduced by three percent in 2005, four per cent in 2006 and five percent annually from 2007-2012. The money saved by these cuts will be transferred to a fund devoted to developing the countryside.
  • Eighty percent of that rural development money can remain in the member state where it was generated rather than being spread across the EU.

CEREALS MARKET

  • No reduction in the intervention price for cereals such as wheat, barley and maize. The minimum cereal price remains unchanged at €101.31 per tonne.
  • Direct aid remains unchanged at €63 per tonne.
  • Monthly increments, a subsidy to help farmers store cereals, are reduced by 50 per cent.
  • Abolition of intervention support for rye.

MILK MARKET

  • Dairy reform brought forward one year to start in 2004.
  • Minimum price for butter cut by an extra 10 per cent compared with 1999 reform, a total reduction of 25 per cent.
  • Skimmed milk powder minimum price reduced by 15 percent over three-year period starting 2004.
  • No milk quota increases in 2007 and 2008.

REUTERS