Farm Ireland
Independent.ie

Saturday 25 February 2017

Southeast is the biggest loser with flat-rate SFP plan

Darragh McCullough

Darragh McCullough

While various hybrid forms of the Single Farm Payment (SFP) system are being explored for Ireland at the moment, it appears increasingly likely that we will be operating on a flat-rate payment system at some point in the not too distant future.

Trinity College's Professor Alan Matthews has analysed the impact of such a change according to farm size, enterprise and region. He presented his findings on this and the likely cost of implementing the controversial greening measures at a recent meeting of the Agricultural Economics Society.

Contrary to claims by the main farming organisations, Prof Matthews said that concerns that a shift to a regionally based payment system would threaten the Food Harvest 2020 targets are overblown.

He said that production potential would only be affected if land was either farmed less intensively or went out of production.

However, Prof Matthews added that studies have already shown that this would not be the case. Instead, he believes that opposition to a flat-rate payment system is driven by those who face income losses rather than concerns over the loss of output in the beef, dairy or cereal sectors.

His analysis shows that the biggest losers will be predominantly located in the southeast, where the average SFP payment is close to €400/ha, according to last year's National Farm Survey data (see the table, top right). By flattening payments across the country, farmers would lose nearly a quarter of their payment, compared to farmers in the west and Border areas, whose average of €260/ha would be topped up by 20pc.

By enterprise, it is the mixed livestock farmers who stand to lose most, with average payments of more than €400/ha being cut by 24pc, while dairy farmers would only see a cut of 1pc (see the table, middle right).

Prof Matthews also showed that the main bulk of money transfers in a flat-rate system would accrue to smaller farmers with outputs of less than €25,000 (see the table, bottom right). Perhaps because of this, 55pc of all farmers would actually benefit from a switch to a flat-rate payment system (see the graph, above).

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