Heads of the Europe Union's 27 member states will meet on Thursday with the aim of establishing a final figure for the next EU budget. The budget will cover the period 2014-2020 and is expected to be substantially smaller than during the last period.

After previous budget talks ended in failure in November, the EU Council will meet in Brussels tomorrow afternoon in an attempt to reach an agreement. Several Northern nations, including Britain and Germany want to see the budget subjected to cuts in line with austerity measures in place elsewhere in Europe, but France and a number of Southern and Eastern states have opposed their position. Nevertheless, it now appears cuts will go ahead.  

Ahead of the talks, German premier Angela Merkel has travelled to Paris to meet French President François Hollande.

As the largest area of spending, accounting for around 40 percent of the budget, it is extremely likely that agriculture funding will suffer significant cuts in the forthcoming budget agreement. Environmental groups across Europe have suggested that such cuts could jeopardise environmental protection efforts.

As the Council meets, members of the European Parliament are planning to discuss how funding will be allocated under the reformed Common Agricultural Policy. The Parliament's Agriculture Committee last month voted on a number of amendments to the CAP, which in turn will be voted on by the Parliament as a whole next month.

Commenting on these proposed reforms, French Socialist MEP and chair of the Committee of the Regions, René Souchon said that whilst the principal of capping aid for the richest landowners and farmers is to be commended, the ceiling of €300 000 established in January is far too high "to enable a genuine redistribution and to limit the speculation now taking place in certain Member States." He added that the EU should develop a "genuine" rural development strategy, given that European rural development funds are in danger of drying up.

Much has been made of the UK government's attempts to negotiate making 20 percent of CAP direct payments 'flexible', and able to be shifted to the rural development pot (Pillar 2) if states so wish. Although the government said this would ensure better environmental protection and fairer spending of CAP money, critics claim the measure was born of a desire to do away with support payments altogether and make farming 'more responsive to the market.'

NFU policy director Martin Harworth said ahead of the Council meeting, "We have said all along that it would be unrealistic for us to expect the CAP to be exempt from the austerity measures that are being applied throughout the European Union, [However], we expect our government to treat English and Welsh farmers equitably and to ensure that they can operate on a level playing field with our main competitors in the rest of Europe.

"We are deeply concerned that the UK government continues to negotiate to have the powers to move up to 20 per cent of the money at national level from the UK's direct payments envelope into its rural development envelope. This would hit our farmers far harder than any cuts that are applied fairly and equally across all European farmers."

In contrast to the stance of NFU and European farming organisation Copa Cogeca, French MEP M Souchon welcomed the prospect of freeing up more funding for rural development.