The European Commission's proposals for the 2021-27 EU budget suggest a 5 per cent cut in CAP funding. (Some analysts think that the cut is actually bigger). Direct payments would be reduced by four per cent and Pillar 2 payments would take a fifteen per cent hit: Budget cut
Payments to farmers would be capped at €60,000. This is at the lower end of the €60,000-€100,000 spectrum suggested in the original communication on the CAP last autumn. The relatively low capping figure favoured by the Commission will reassure UK farmers concerned about being put at a competitive disadvantage by the reduction of direct payments after Brexit.
The Basic Payment Scheme will be renamed the 'Basic Income Support Scheme'. This is the first time the EU has explicitly identified area payments as being for the purpose of income support. It is an inefficient means of supporting income as the relationship between farm size and household income is far from straightforward.