COMMENT:Flattening of Cap payments will undermine our most productive farmers

With agreement on the Multiannual Financial Framework for the EU earlier this month, the framework for the Common Agricultural Policy (Cap) over the next seven years is in place. The focus will switch now to getting a deal on Cap reform under the Irish presidency. These decisions will have major implications, both for individual farmers and for the future growth potential of the sector. The outcome here will define the success or otherwise of Minister for Agriculture Simon Coveney.

The Cap is a vital driver of growth and jobs, supporting 26 million farmers and employing 40 million in Europe when upstream and downstream businesses are included.

While the agreement, which confirms funding of nearly €11 billion for Ireland over the next seven years, provides some certainty, there are significant decisions to be made which will have serious ramifications for Irish farmers and the agri-food sector.

This envelope for Ireland is about much more than “divvying out the money”, as Mairéad McGuinness pointed out here a few weeks ago. What is needed is a model that rewards production and encourages investment at farm level, which in turn will underpin 300,000 jobs in the economy and more than €9 billion in food exports.

Analysis carried out at UCD shows the economic impact and the jobs that can be created, particularly in the rural economy, as a result of investment in agriculture.

Commission proposals

Farmers are concerned about the impact of what the EU commissioner for agriculture, Dacian Ciolos, has proposed. To assign a flat payment to all farmers, irrespective of enterprise, activity or land type, runs counter to one of the central aims of the Cap, namely the support of food production.

The Irish Farmers’ Association remains opposed to flattening and regionalisation. Flattening of payments will cause major disruption and undermine our most productive farmers. Several member states, including Ireland, require flexibility to limit the losses that will be imposed on productive farmers.

The task for the Minister now is to deliver a deal on direct payments that addresses these critical issues, and safeguards active farmers for the next seven years, as well as putting in place a strong rural development programme.

We also need to see a more flexible approach to the greening measures, which cannot be used as a re-distribution measure and cannot result in extra costs or bureaucracy, or in land being taken out of production.

Put simply, the Single Farm Payment must reward work, and not armchair farmers who have land but produce nothing. Productive farmers are those most exposed to volatility in prices and input costs, and they must be prioritised.

We believe that objective criteria, such as labour units and minimum stocking rates, must be used to distinguish between active and inactive farmers. The option of 10 per cent coupling must be available to all member states, to protect the vulnerable livestock and sheep sectors and vulnerable regions.

For young farmers, funding that encourages new entrants and facilitates transfers should be a priority. This must be subject to strict criteria that incorporate agricultural education and credible business plans.

Rural Development

The rural development programme is an important part of the overall Cap, and for this reason the reduction in EU funding is a major disappointment.

Farming is the main driver of economic growth in rural economies, and funding through the programme is vital in supporting on-farm capital investment and restructuring, and agri-environment measures. It also maintains farming in vulnerable regions, supporting farmers in their provision of agri-environmental goods and services and contributing both to on and off-farm economic development.

Ireland has traditionally participated strongly in the programme and this must be reflected in the next seven-year programme.

The Government’s continued commitment to agriculture-led rural development programmes can best be demonstrated by utilising EU funding to the maximum, which means 50-50 co-financing as well as a national top-up.

The IFA’s submission for the next programme includes a meaningful agri-environment scheme for 60,000 farmers, along with disadvantaged area payments which are vital to support low-income farmers.

Outcome

There is a big challenge ahead for the Government to negotiate a Cap reform that will create the most favourable conditions to fulfil the potential identified in Food Harvest 2020. Working closely with those member states that share our views on the shape of the next Cap will be crucial.

The European Parliament has co-decision for the first time, which places it at the centre of the decision-making process. We would hope that Irish MEPs can play their part in securing a deal that achieves our twin objectives of harnessing sustainable growth and maintaining our family farm model.

John Bryan is president of the Irish Farmers’ Association.