Brussels, 04/09/2013 (Agence Europe) - On 11 September, the EU management committee is expected to vote on the European Commission proposal to allow member states pay a 50% advance on direct payments for 2013 (see EUROPE 10912). 50% of direct payments could be paid to EU farmers as early as 16 October, the beginning of the 2014 budgetary year for the common agricultural policy (CAP), instead of 1 December. This will allow a six-week headstart in the calendar to be made, thereby granting a shot in the arm to farmers experiencing cash flow problems due to bad weather conditions, for example (including the drought). Hikes in animal feed costs and fodder shortages are also causing problems.
At the same time, the Commission is expected to reach a decision in September on reduction rates to apply to direct aid for 2013, so that the agricultural spending ceiling for the 2014 financial year is respected. The Commission proposed a 4.98% reduction in March (€1.47 billion) in direct aid to be paid in 2014 (2013 requests), in an effort to respect the spending ceiling agreed in February by heads of state and government for the 2014 budgetary period. The Council and European Parliament have until 30 June to reach a joint decision on this proposal but so far, no decision has been made. According to current regulation, if they failed to reach a decision by that date, the Commission is allowed to set the reduced rates of direct payments for of 2013 itself. If an adjustment is needed later, in order to take into account more recent spending forecasts, the decision will be made by the Council alone. In the middle of October, the Commission will present (as usual) an amending letter to the 2014 draft budget, in order to provide updated indications on agricultural budgetary requirements. This could mean that an adjustment to financial rules is introduced. (LC/transl.fl)