ICSA concerned about Government cutbacks on co-funding rural development

6th February, 2012

ICSA rural development chairman John Barron has expressed concern over government plans to avail of an EU concession to draw down rural development funds at an 85% co-funding rate rather than 50 or 55% as at present.  Mr Barron pointed out that this would lead to less funds being spent on rural development programmes such as LEADER and would facilitate the Government in winding down programmes such as the early retirement scheme, as well as dashing any prospects of reopening schemes such as the Young Farmer Installation aid.

“The key to understanding this is that the actual ceiling of EU money is fixed.  Therefore, when you switch to 85% EU funding/ 15% exchequer funding, rather than a 50:50 mix, the outcome is a substantially lower amount of co-funding from the Government, not a higher amount of EU funding.”

“My bigger concern is that the government is signalling its longer term intention to reduce all rural development funds.  While this decision only applies to Axes 1, 3 and 4, the message seems clear- Ireland is winding down exchequer funding for all future rural development schemes.  Although Axis 2, covering agri-environment schemes is unaffected for now, CAP negotiations for the post 2013 period are underway and we are trying to make the case for more rural development funding from the EU.”

“However, we have absolutely no credibility looking for increased or even similar levels of EU rural development funds if we are also saying that we can make do with less.  Even if we were to successfully negotiate higher RD funds from Europe, the risk is that the Government will want to retain the 85% rate of EU co-funding leading to a lower overall fund available for RD schemes.”  

Meanwhile, the effect of the decision on the current programme covering 2007-2013, is a €200 million reduction in spend in the rural economy. This cut is achieved by a reduction in the total amount of funding available under Axis 1 by some €87 million and by €113 million under Axes 3 and 4.  This is a huge cutback to rural communities all over the country and will have a substantial knock-on effect on the economy.

“Again, the Government has shown that it is heavy on austerity but light on job creation and economic stimulus,” concluded Mr Barron.