EU farm ministers returned here last night desperate to find painless budget savings to bridge the gulf between member-states in the EU's stalled farm talks.
There is now considerable confidence that ministers will be able to confine the savings to a form of the French degressivity proposal to cut the level of compensation in line with productivity increases.
This follows the apparent admission by the German Minister on Wednesday night that asking national governments to top up direct aid payments, co-financing, is no longer a runner. That was confirmed yesterday by a top aide to the German Chancellor, the Chancellery Minister, Mr Bobo Hombach. Last night, ministers focused on degressivity in its various forms, some of which would still be very painful to Ireland.
A spokesman for the Irish Farmers' Association, Mr Michael Treacy, was adamant that it was not a road down which the Minister for Agriculture, Mr Walsh, should go. "We think the Minister should stand firm against any move towards degressivity because no way can we tolerate premiums and area aid payments being whittled away over time through such a policy," he said.
"What road would they suggest we go down?" Mr Walsh retorted. "We are prepared to contribute to budgetary discipline, but we will work to ensure that the small and medium-sized farmers and the sectors most seriously affected like livestock are not caught."
Degressivity means that price compensation payments, the "cheques in the post", would be cut progressively in successive years, either across the board or by different amounts in each sector to allow for differences in potential productivity increases.
Some suggest a cut-off level of direct aid, or franchise, below which farmers would not face the claw-back, proposed by the Commission at £3,900. The Austrians have suggested a progressive cutback formula to hit large farmers harder. Mr Walsh has accepted The level. The Department says the proposal would exclude only 35-40 per cent of Irish beef producers.
Mr Walsh will also back cuts at the higher level for those receiving more than £120,000 a year, a formula likely to hit considerably harder at the big cereal producers in the UK than the Irish beef and dairy sector.
The latest compromise price package proposed by the Germans last night would push up the cost of the Commission's proposals to some £7 billion more than the ceiling most favoured for the budget. Further compensation to countries like France and Ireland necessary to get a deal is likely to add further billions and hence widen the gap to be bridged by degressivity.
