Tuesday, March 08, 2005

Budget cuts could hit rural development

If the EU budget from 2007 to 2103 is held at one per cent of economic output as some member states insist, it could be the rural development budget that takes the hit. Market support is seen as too politically sensitive to tamper with.

This also applies to the ongoing argument about whether cash for direct aid payments in Romania and Bulgaria should be included under the budgetary ceilings agreed for EU farm payments up to 2013. The option of squeezing the two new members within existing guidelines has been raised as a way of saving several billion euros.

However that would probably mean a reduction of eight to nine per cent in direct aids which would be politically unacceptable to countries such as France. The switch towards a Common Agricultural and Rural Policy, in the spirit of 'multi-functionality', could be placed in jeopardy.

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