Spending protected after UK leaves EU

FUNDS: Member states’ contributions will increase

The European Commission is on course to protect spending after the UK leaves the EU and its net contribution to the budget is lost.

This had raised the prospect of across the board spending cuts, not least to the CAP, which still accounts for the biggest share of spending.

However the EC is on course to increase member states’ contributions from the current 1% of GDP to between 1.1 and 1.2%. This will offset funds lost due to the UK’s departure.

The result could be that farmers here will look with some envy towards a still reasonably well-funded CAP, with direct payments, in the EU-27. The European food industry has warned that Brexit and the potential loss of the Single Market could threaten its growth plans.

This warning came from Food & Drink Europe, which represents food manufacturers across all member states. It says it is currently on track with ambitious plans based around annual growth in value added of around 3%. Its target is for this to continue right through to 2030, but now it is warning that because EU-27 and UK food chains are so closely integrated, Brexit could undermine its plans.

This would result from a no-deal hard Brexit but, even without that, different regulatory regimes inside and outside the EU-27 would create problems. The organisation wants a deal to maintain the Single Market after Brexit, and the longest possible transition period after 2019. The plunge in the value of sterling since the EU referendum in 2016 has boosted UK returns for many agricultural commodities – but figures from the EC show that farmers here are being insulated from some fairly harsh realities.

The value of agricultural production in 2016 fell across the EU-28 for the third year in a row. Excluding the impact of inflation output in 2016 was 405 billion euro, down by 23 billion from its peak in 2013. The figure is effectively a valueadded one, taking account of input costs.

France remained by far the EU’s biggest agricultural producers, followed by Italy, Germany and Spain.

Vegetables and other horticultural crops added the most value, followed by milk. The EC has announced a public consultation into the decline of pollinators.

These include bees and butterflies, and it is estimated that for agricultural crops alone some five billion euro is generated by pollinator activity.

Of the species that pollinate, one in 10 face extinction, with bees under particular pressure from environmental sources. The commission wants to develop a long-term strategy to protect pollination, and its public consultation is about seeking views to drive policy.

The consultation ends in April. If a plan is put in place this raises questions about whether the UK will sign up to it or go it alone after Brexit, in line with the government’s commitment to greener farm policies.

Picture: Getty. The European Commission has launched a public consultation into the decline of pollinators.