Agreement secured on CAP reform

The Irish Presidency of the European Council has secured agreement on reform of the Common Agricultural Policy, paving the way for the most significant reform of the EU's agriculture policy in a decade.

Following three days of negotiations between the European Commission, European Parliament and the EU's member states, represented by Irish agriculture minister Simon Coveney, the final package was agreed late this afternoon.

Among the most significant changes are a revision to the way the Single Farm Payment is distributed, and new measures to promote environmentally-sustainable farming.

The new package outlines how the EU’s agricultural policy, and distribution of single farm payments will be distributed over the next seven years. This includes a change in the way the Single Farm Payment - the EU’s direct support for farmers- are paid, a key issue for Irish farmers.

Under the new system, support will be calculated on a per hectare basis, rather than linked to past productivity. The new CAP will see a number of countries, including Eastern countries such as Romania and the Baltic states, receiving an increase in their entitlements, as countries are brought towards a minimum payment.

Within individual member states, countries will also have to change the way distribute payments. Through a process called ‘internal convergence, ‘farmers will be entitled to a minimum level of payment. To accommodate this redistribution, around 50,000 Irish farmers who are currently on higher payments will see a dip in their annual payment, while an estimated 60,000 farmers who are currently below the average will see their payments increase.

Irish farming groups had been lobbying for the lowest level of minimum payment to be introduced, arguing that a high minimum payment would eat into the payments of farmers who have the highest payments, and are traditionally the most productive farmers.

Speaking from Brussels, IFA president John Bryan said that "tens of thousands of family farms will lose under this flawed Reform", though he noted that significant progress has been made to minimise the damage to Irish agriculture since the CAP Reform Commission proposals first emerged. However, 50,000 of Ireland's most productive farmers will lose between 15 per cent and 35 per cent of their overall payment by 2019, he noted.

Most Irish farmers will also see additional cuts to their income, through various changes to the Single Farm Payment scheme, such as the introduction of a youth farming initiative and a change to the crisis management fund.

Further details have yet to emerge as to how member states will manage the various rural development schemes - known as Pillar II - that also form part of CAP. Today, the Irish Farmers Association said the government must commit to 50/50 co-financing of Pillar 2 schemes so that a comprehensive package of rural development measures is put in place for vulnerable sectors and regions, and to encourage investment in agriculture.

Under the new CAP proposal, sugar quotas will be abolished by 2017, giving countries the option to enter the market if they wish. Ireland exited sugar production as part of the reform of the industry in 2006. Irish MEP Sean Kelly welcomed the move on sugar quotas, as a " new dawn for the Irish Sugar Industry", calling for a revival of the "once vibrant sugar industry," in Ireland. "The sugar reform had aimed to introduce competitiveness and efficiency, but quite the opposite was achieved with a loss of revenue, employment and home-grown produce," he said, noting that the sugar beet industry in Ireland was once valued at €150 million a year.

Beet Ireland said that the redevelopment of the Irish sugar industry would be a major economic stimulus for Ireland and, in particular, for the agri-food sector

In terms of environmental measures, 30 per cent of the Single Farm Payment will be linked to ‘greening ‘measures,’ though this will have limited impact on Irish farmers, as around 80 per cent of Irish farmland is permanent grassland. The various Rural Development Schemes will also be conditional on certain ‘greening’ measures, though a number of environmental lobby groups expressed concern that the proposals had been watered down. They argue that some of the additional environmental measures introduced to the schemes, have no added value.

European Commissioner for Agriculture Dacian Ciolos said the agreement gives the Common Agricultural Policy "a new direction" and will lead to far-reaching changes, including making direct payments "fairer and greener."

Officials negotiations on CAP reform began 21 months ago, but it has fallen to the Irish presidency of the Council of the European Union to secure final agreement.