Copa-Cogeca criticised today new proposals to cut EU farmers direct payments under the Common Agricultural Policy (CAP) by 5% in 2013. The cut had not been planned for and risks jeopardising important investment decisions already made by farmers for 2013 and deepening the current economic crisis, Copa-Cogeca warned.

Copa-Cogeca Secretary-General Pekka Pesonen said "Farmers have made investment commitmentsfor the year 2013 and had not accounted for this new cut . It comes as a complete shock. With production costs barely covering market prices and market volatility on the rise, it is the last thing farmers and cooperatives need. . Farmers' incomes are already half the level of average earnings and many, especially in southern countries, are being hit badly by the current economic recession.  With nearly 40 million people employed in the EU agri-food sector, this latest move threatens growth and jobs in EU rural areas and deepening the crisis in rural areas. I urge MEPs and EU Ministers to revise this decision and ensure that there is a strong EU budget in the future to ensure a viable agri-food sector to meet growing food demand". 

The Commission proposal, which includes a threshold to exempt the first €5 000 of farmers' Direct Payments from any reduction, foresees a reduction of just under 5% (4.98%) in all Direct Payments – or an overall reduction of €1 471.4 million. This proposal relates to applications for Direct Payments in 2013, to be submitted by farmers in May 2013, and usually paid out in December 2013 (from the 2014 budget), but will not apply for Bulgaria, Romania and Croatia because the system of CAP Direct Payments is still being phased-in.

This move follows the accord among EU heads of government1 to set a budget ceiling for 2014 which is roughly €800 million lower than the Commission proposed and to create a new market crisis reserve (worth €424.5 million) from within Heading 2 of the Multiannual Financial Framework (MFF), rather than from a separate reserve created outside the MFF as originally proposed by the Commission, and to finance it through financial discipline. Under the Regulation, the proposal needs to be adopted by the European Parliament and the Council by 30 June 2013. If not, the Commission is empowered to set the adjustment rate. The Commission will update its forecasts for market and direct payment spending for 2014 in the autumn, as usual, and, if necessary, propose an adjustment to the rate of financial discipline, which would then need to be adopted by the Council by December 1.