UK sacrifices Scottish agriculture to maintain EU rebate

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  By a Newsnet reporter

Alyn Smith MEP has condemned the UK Government for failing to negotiate a greater share for Scotland of the Rural Development budget for 2014-2020, “in a transparent attempt to preserve an increasingly discredited rebate which doesn’t benefit Scotland”.

The UK rebate is a rebate on the United Kingdom’s contribution to the EU budget, currently worth approximately £5 billion a year, it goes directly to the UK Treasury and not to communities in need.

The UK’s case for the rebate, which was negotiated by Margaret Thatcher in 1984, rests upon the fact that the UK receives less in the way of development and agricultural funds from the EU than other member nations. 

Maintaining the rebate is politically important for the Conservative-led Coalition government as it provides the Prime Minister with ammunition in his fight with Eurosceptic rebels within his own party.  The political imperative to maintain the rebate at current levels means that the UK does not make strong arguments for increased EU financial support for rural development projects, which results in damage to Scotland’s agricultural interests.

Mr Smith’s comments follow the release of figures from the European Commission showing the proposed breakdown of the €84.723 billion 7 year Rural Development budget among 28 Member States, which leaves the UK with a measly €350m for 2014, falling to €306m by 2020.

Though all Member States face cuts due to the tighter budgetary circumstances of a Europe dealing with austerity, the UK’s share of the budget is unprecedentedly low for a country of its size.

As has been the case for the last seven years, the UK comes dead last among EU countries – receiving a miserable 20€ (approx £17.15) per hectare in 2014, compared to an EU average of 72€ (£61.75) per hectare. Countries of a similar population and agricultural area to Scotland enjoy a far greater share; Ireland receives 70€ per hectare, Finland 138€ per hectare, and the Czech Republic 83€ per hectare.

Furthermore, during the budgetary negotiations at the European Council summit in February, the UK missed the chance to negotiate itself a top-up of Rural Development funds: unlike France, which received €1 billion extra, Portugal at €500m and Ireland at €100m for the next 7 years. In total, 11 Member States received sweetheart deals in the MFF – but not the UK, despite it receiving the lowest share of subsidy per hectare throughout the EU.

Rural Development funds from the EU budget must be co-financed at different rates from national budgets. The Scottish Rural Development Programme supports on-farm environmental protection schemes, investments into rural businesses, and support for forestry and crofting communities, amongst other uses. The figures have yet to be formally approved by the European Parliament.

Mr Smith, who is the Scottish full member of the European Parliament’s Agriculture Committee, and lead negotiator for his political group for the Common Agricultural Policy’s Rural Development Regulation, said:

“It really is galling that the wins we have secured on the objectives of Rural Development funding risk being totally undermined by the fact the UK has secured such a remarkably poor deal.

“We’ve argued for years that the UK is structurally incapable of negotiating a good deal in Brussels for Scotland’s farmers, land managers and rural businesses, and these figures are yet more proof that independence, and the ability to represent your own interests in the EU, really does pay a dividend.

“In its obsession with maintaining the level of the rebate – a rebate which goes straight to Treasury coffers and doesn’t benefit Scotland – the UK Government has scandalously allowed itself to be squeezed out of vital support mechanisms for key communities in Scotland. Just as in the last seven years, the UK will continue to rank dead last in its share of Rural Development support: even in absolute terms it receives less money than much smaller countries such as Greece and Austria.

“What a sorry state of affairs, given that small independent countries like Ireland, Finland and Slovakia have managed to negotiate themselves much better deals, which can lift them up to or above the EU average.

“It’s crystal clear to me that the UK holds Scottish communities back in Europe: not just through its eurosceptic attitude and its ability to lose friends and alienate people, but through its complete lack of interest in securing a good deal from the EU budget. Scotland can do better, but we need independence to get direct representation in these critical negotiations.”