Farm Ireland
Independent.ie

Thursday 19 October 2017

2015 reference year touted as CAP agreement in sight

Darragh McCullough and Declan O'Brien

Reports from the crunch negotiations in Brussels suggest that 2015 is set to become the new reference year for payments.

The news will come as a bombshell to an Irish land market that is already over-heated on the back of speculation by farmers and land-owners.

The original proposal outlined by the EU Commission 18 months ago to set 2014 as a reference year caused uproar here and has helped ratchet up prices for conacre in the interim.

However, farmers depending on rented land now face the prospect of the market remaining at artificially high levels for an additional 12 months. Both landowners and those seeking to rent additional land have attempted to maximise the amount of hectares that they are farming in recent months in an effort to benefit from possible CAP payment windfalls in the future.

The negotiations between farm ministers from the 27 EU member states on the future of the CAP are entering the final phase in Brussels today.

Agriculture Minister Simon Coveney is chairing the two-day talks, that aim to agree the council of ministers' position for crucial "trialogue" negotiations involving the EU Parliament, the commission and the council of ministers.

"This is a reform. It's not just about protecting the status quo. There will be winners and losers," he said on his way into the talks yesterday.

"We have to now move from debating this reform to actually deciding it. There were 27 different sets of priorities. Our job is to find a compromise that everyone can live with," he added.

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However, hopes are high that an overall agreement governing the payout of the €370bn CAP budget for 2014-20 will be brokered later today.

Negotiators know that if they fail to agree a deal today the chances of securing an agreement before June 30 will become unlikely.

The rate of internal convergence of single farm payments (SFP), the level of greening and amount of re-coupling of payments allowable will all be key issues for the Irish delegation to nail down.

Resisting

Farm organisations will be strongly resisting the Commission's aim to bring Irish SFP entitlements up to a minimum level of €196/ha.

The IFA are lobbying other member states to push for a minimum payment closer to €130/ha or 50pc of the average.

Commissioner Ciolos' proposals to bring all payments to the national average of €260/ha would redistribute over €370m of Ireland's total SFP fund, with 55,000 farmers on higher entitlements losing up to 40pc of their payments, while 75,000 farmers would stand to gain.

The main farm organisations have argued that a radical redistribution of SFP funds had the potential to seriously hit the incomes of "active farmers". But this assertion has been challenged by farmers on low payments.

Minister Coveney said last week that he was sticking to his original proposal that would limit the redistribution of the SFP to less than €80m.

However, with both the French and German farm ministers throwing their support behind the front-loading of SFP entitlements, Minister Coveney could find it difficult to limit redistribution.

Whether an environmental or greening payment will be introduced at a national flat rate per-hectare payment or as a percentage of each individual's entitlement was still to be decided.

The latter proposal from the Irish delegation would also limit the amount of money that would be redistributed among farmers here.

Irish Independent