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Budget update means 2.45% cut instead of 4% for direct payments

Ulster Farmers’ Union President Harry Sinclair said that the outcome could have been worse following the decision by the EU Commission to adopt proposals setting the financial discipline rate at 4% and exempting the first €2000 of an individual’s payment. The financial discipline mechanism was triggered to keep the overall Common Agriculture Policy (CAP) within the set budget limits following EU heads of state agreeing a reduction in the overall 2014-20 EU budget.

UFU President Harry Sinclair said; “While we would prefer not to be in this situation at all, the best outcome we could have hoped for was that the EU Commission would come to sensible conclusion as to how to enforce the financial discipline mechanism. We supported a reduction in the threshold from €5,000 to €2,000 which has now been agreed for this year resulting in a saving of around 1%. Here in Northern Ireland, farmers are already getting a raw deal. Incomes are down 52%, the cost of production continues to rise meaning farmers can scarcely afford further cuts to their Single Farm Payment.

“On the plus side, we will be better off than some other EU Member States as the financial discipline cuts will be cushioned by both a favourable Euro/Sterling exchange rate and the Northern Ireland Agriculture Minister’s decision not to apply voluntary modulation this year. The exchange rate is 4.76% higher than it was in 2012 and our Minister’s decision on Northern Ireland voluntary modulation means that farmers will receive a 9% gain up to €5,000 and a further 4% between €5,000 and €300,000 compared to last year. Not having the financial discipline mechanism triggered would have meant an even bigger much needed income boost for our farmers but overall, we will be roughly £16million better off this year, which is still welcome news.”