EU27 poised to protect CAP budget after Brexit

The European Commission is on course to protect its budgets, including farm spending, after the departure of the UK as a net contributor.

A debate has been taking place about whether member states of the EU27 should increase contributions or cut spending after Brexit.

It has now opted for a higher contribution from member states, breaking the 1% of national gross domestic product (GDP) barrier for the first time. The final figure is likely to be somewhere between 1.1% and 1.2%.

This should protect the CAP budget, including direct payments, meaning farmers in the post-Brexit UK may look to the EU27 with some envy if the Treasury in London is less generous.

Percentages are often misleading but statistics suggest that across the EU organic farming is on the rise.

There are now 13.5 million hectares of organic land. As a percentage of conventional land it is still tiny at 6.7%, but that is up almost threefold when compared to 2016.

The number of organic farmers is high, meaning average farm size remains small.

In terms of production, the biggest member state was Spain followed by Italy and France. The organic market was worth more than 33 billion euro in 2017.

The figures come from the organisation representing organic farmers and on that basis need to be treated with caution.

They will, however, go down well with the European Commission, as evidence that its new organic standards are delivering a good outcome.

The decline in the value of sterling is already taking a toll on the Irish farming and food industry, and that is set to get worse.

The UK is Ireland’s biggest market for food, and since most of its business is with the major supermarkets, it is having to take the currency hit.

Now a report says the impact of Brexit on key sectors, led by agriculture, could see the national GDP fall by between 2.8% and 7% in the 10 years after Brexit.

The lowest GDP impact will be if the UK concludes a deal to leave the single market intact which would maintain Irish tariff-free access.

The worst possible outcome for Ireland would be a hard Brexit, which many in the Conservative party now favour, with World Trade Organisation tariffs on food imports from the EU27.

After a week of talks in Brussels, the European Commission and the Mercosur countries of South America are no closer to a free trade deal.

The talks will resume later this month in Paraguay, although prospects for a speedy deal now look less likely.

Picture: Getty. Organic farming is growing across the EU.