Brussels, 14/11/2005 (Agence Europe) - On 26 October this year, the European Commission adopted Amending Letter No. 2 to the Preliminary Draft Budget for 2006 cutting farm spending by EUR 362 mil. The Commission has changed its euro/dollar exchange rate forecasts, used for calculating export refunds, thereby cutting spending by EUR 169 mil on arable crops, sugar and cotton.
Leaving aside rural development, EU farm spending for 2006 is now estimated at EUR 43,280,000, 000 rather than EUR 43,641,000,000 as forecast in the first Preliminary Draft Budget, leaving a margin of around EUR 1,567,000 below the Financial Perspectives ceiling of EUR 44,487,000,000. This reduction comes mainly from intervention in agricultural markets (-350 mil). Lower spending is forecast on cereals (-136 mil), rice (-22 mil), sugar (-122 mil) and textile plants (-28 mil). This is balanced by an increase in forecasts for fruit and vegetables (+110 mil) and wine (-165 mil). Funding is revised down for milk and dairy products (-285 mil) and beef (-80 mil), and revised up for food programmes (-48 mil). Funding forecasts for direct uncoupled aid (included in the CAP reform of 2003) have not changed from the previous preliminary draft budget, namely EUR 16,375,000,000. Forecasts for rural development funding remain at the upper limit allowed under the Financial Perspectives, namely EUR 7,771,000,000 in commitment appropriations and EUR 7,711,000,000 in payment appropriations.