A number of difficult questions remain on CAP reform and will dominate discussions in the coming months. Here, the five main Irish agriculture organisations give their views
1. Should Ireland implement capping at an effective rate of €66,000 or €100,000, or at a rate in between?
ICSA agrees with capping on the basis that money must be directed at ordinary-scale farms, and given that the average payment is less than €10,000 per farm, the cap should come in as close to €60,000 as possible. ICSA believes there should be no exemption for employees because the CAP should be focused on paying farmers.
We remain very much in favour of capping and believe it should be done at the lowest rate available, which is €66,000. In addition to this, there shouldn’t be any allowance for labour units.
The very high payments made to an elite number of farmers both in Ireland and across the EU has done untold damage with the general public and continues to undermine our ability to deliver a significant increase in the overall CAP budget. If CAP is about supporting the family-farm model, then there must be a realistic upper limit, which ideally should be well below the €66,000 outlined.
Macra na Feirme
Macra na Feirme has consistently spoken for a stepped rate of capping above €60,000 up to a maximum of €100,000. The stepped approach needs to consider the farm labour in each specific circumstance and make allowance for farm labour, reflected in the payment. It cannot be the case that a farm supporting intergenerational families is unfairly treated or placed in a position whereby one generation can no longer be supported.
Wherever the Minister [McConalogue] sets the cap, it should exclude any leased entitlements as these are ultimately paid back to the landowner. They must also consider the number of individuals making a living from a farm, including family members.
ICMSA supports a cap of €60,000.
2. Should internal convergence stop at 85pc of the national average payment entitlement value in 2026 or should it go to a higher percentage?
Macra na Feirme
We have previously called for convergence of not greater than 75pc by 2026.
However, a situation cannot arise where a farmer with a small number of entitlements, but with an above-average entitlement value, is penalised based on internal convergence.
Forgotten farmers must not be left to one side again and continue to be disadvantaged in comparison to other farmers.
IFA is against any further convergence beyond 85pc. The new eco-schemes are also a form of convergence as they will be paid back at a flat rate regardless of a farmer’s per-hectare payment.
ICMSA believes convergence should stop at 85pc.
The system of convergence is throwing up serious anomalies. For example, many people below €10,000 will see their payments cut to give increased payments to people above €30,000.
ICMSA has proposed that farmers with a payment below a certain level should be exempt from convergence.
Convergence should go to 100pc. While this will be of concern to some farmers, especially small holders that have high entitlement values, there are options that can protect them, most notably the CRISS.
Continuing to pay farmers based on production levels from over 20 years ago is not credible.
With CAP payments now based on conditions through the GAECs, then any new payment model must reflect this and as all farmers are expected to operate under the same conditions, then its only reasonable the payment rate per hectare should be the same.
No, internal convergence should stop at 85pc. The eco-scheme element is likely to be a flat rate anyway, so the reality is there will be a radical flattening of payments.
3. Should Ireland go beyond the 10pc of direct payments to redistribute from larger to smaller or medium-sized holdings? Or should Ireland seek to use the derogation to reduce the percentage? Should this funding be redistributed to farmers with holdings of less than 30 hectares?
ICMSA has asked the Department of Agriculture, Food & Marine to carry out an analysis on the redistribution payments. It is quite possible that many people with small acreages would lose under redistribution. The analysis needs to be carried out by the Department and decisions made based on the analysis.
We are supportive of proposals to redistribute 10pc of Pillar 1 payments under the Complementary Redistributive Income Support Scheme (CRISS) as 10pc was the percentage that we targeted for this support.
For small holders that currently have high-value entitlements, this support will be critical to off-set possible reductions under convergence. On this basis, we struggle to understand the approach taken by other groups and organisations who continue to fight against this option.
We don’t believe Ireland should use any derogation to reduce the percentage.
With regard to paying on up to 30ha, it is our opinion that this should be the maximum, but it may need to be lower. Based on modelling we have done (at 10pc with additional payments from capping at €60,000), we could pay an additional €80 on the first 15ha. However, a final decision on this can only be done after a full analysis of the most recent DAFM modelling.
It is crucial that the Minister properly assess the impact of further convergence and eco-schemes on farm incomes, particularly for farmers in the drystock and tillage sectors, before deciding whether to go ahead with any further redistribution. The Minister needs to outline his entire plan, including funding for Pillar 2 schemes.
There is a major problem with the process of convergence when you see small and medium-scale suckler, sheep or beef farmers with above average per-hectare payments being cut significantly even though their overall payment might be in the range of €10-€15,000.
However, the problem with all of the proposals we have seen is that there is a lot of cutting of all payments to give a small increase to smaller-scale producers. We would prefer to see a plan to deliver an agri-environment scheme worth up to €15,000, which would be much more beneficial to small and medium-scale cattle and sheep farmers.
Macra na Feirme
The Department must ensure all direct payments are going to the benefit of active farmers first and foremost. A strong active farmer definition is needed to ensure that armchair farmers are not benefitting from direct payments. Any redistribution of direct payments must not disadvantage active farmers.
Redistribution of payments cannot result in a larger farm becoming unviable or not offering the opportunity for a younger person to enter into the business. We cannot support the redistribution of payments if it will result in some farms becoming unviable or lessening the opportunity for young people to enter farming.
4.Should Ireland go beyond the 25pc of direct payments to be allocated to eco-schemes? Or should Ireland use the flexibility in the regulation to reduce the percentage allocated to eco-schemes?
The problem with eco-schemes is that a cut to every farmer’s basic payment is what funds them. We have no clarity as to how farmers will qualify. Given this, we should use the flexibility to try to minimise the deduction.
Ireland should not go beyond the 25pc. The reality for all farmers is that the eco-scheme means a reduction of 25pc in income support, which is a very substantial cut. The conditions of the eco-schemes must be achievable by all farmers, simple to implement and Ireland should utilise the flexibilities to ensure the funding is used in full.
Macra na Feirme
Pillar 1 should have a strong focus on income support, as it was originally set out. We already have seen in the previous CAP the above EU average that Ireland allocated to greening and eco-schemes.
Macra na Feirme supports good eco-schemes that are complementary to good farming practices, while also being results-based and open to all farmers to enter equally.
Macra na Feirme believes that the maximum flexibility must be given in the regulation to reduce the percentage allocated, particularly over the learning period. We have to be cognisant that eco-schemes must be farmer orientated and must be complimentary.
On balance, we believe that 25pc for eco-schemes is reasonable and don’t think it should be reduced or increased.
However, in relation to the eco-scheme, it is vital that all farmers get equal access irrespective of farm or land type.
Measures to deliver on this will need to be available to accommodate all farms and land types. It is also vital that there be a uniform payment per hectare delivered from the commencement of the new CAP Programme.
There is only a small level of flexibility for the first two years of the new CAP in relation to eco-schemes.
So the reality is that the eco-scheme will be 25pc sooner or later. The critical point is that there must not be too much conditionality attached to the eco-scheme so that farmers can get paid more for actions in a voluntary agri-environment scheme in Pillar 2.
What aspects of the current system do you consider unfair and what is the best combination of all of the above mechanisms in order to bring about a fairer distribution of direct payments?
Continuing to support farmers based on a production type from over 20 years ago is very unfair, especially on new entrants. While some farmers lost out for other reasons and can’t be reimbursed for lost income to date, we can ensure a fairer system going forward through 100pc convergence.
It is unfair that CAP payments have gradually slipped away from cattle, sheep and tillage farmers who were meant to be the main beneficiaries.
According to the 2019 Teagasc National Farm Survey, the average basic payment per hectare for dairy farms was €280 compared to €243 for sucklers and €245 for sheep. This cannot be fair and it reflects the fact that suckler, beef and sheep farmers who are much more dependent on CAP supports are getting a raw deal.
The second key issue is that a REPS scheme, which 20 years ago delivered up to €10,000 per farm, has been decimated to the current GLAS and REAP schemes which deliver typically €4,000 of benefit to a farmer. So we must have an ambitious agri-environment scheme in Pillar 2 that can direct up to €15,000. We also need to increase the supports to the suckler and sheep sectors, which could be a combination of payments from Pillar 1 and 2 or by transferring funds to Pillar 2 from Pillar 1.
Macra na Feirme
The historical basis is challenging, still operating off a baseline from years previously. We see those who have long departed farming activity still getting payments. Therefore, the CAP is not reflective of current farming activity.
Overall, there isn’t enough focus or emphasis on generational renewal. It isn’t enough to only be named as a pillar.
Maximum ambition under young farmer schemes and top-ups is a necessity, with the potential for a specifically designed young farmer eco-scheme. The forgotten farmers cannot be left behind once again. Supports must be included within the CAP budget and national co-financing to ensure this group is no longer considered forgotten.
The problem is there is no extra funding in Pillar 1. It is a ‘Rob Peter to pay Paul’ reform which is designed to divide farmers. Given what was decided at EU level, it will be an unfair outcome for a cohort of farmers who will have their incomes devastated.
Many of these are our most productive farmers. Some politicians and others are playing to the gallery without considering the consequences for this group of farmers, the overall viability of the sector or the impact on economic activity in rural areas.
Failure to address the issue of farmers with a high payment per hectare and a low overall payment is particularly damaging. In terms of the best combination, the Department needs to provide a clear analysis on the options available and, critically, the combination must include a definition of a genuine farmer.
6.Should there be a specific intervention to incentivise gender equality?
It is important that joint herd registration is encouraged and that where two farmers are making their income from the farm, this is recognised in the regulations.
The Department needs to provide clarity on the options available in relation to gender equality.
Macra na Feirme
There needs to be consideration given to the payment level to young female farmers, while also looking at the role female farmers can play in KT Groups and the level of investment support that young farmers in general receive.
We are currently working on proposals designed to incentivise and increase the number of young females entering farming and pursuing it as an active career.
To the best of our knowledge, no farmer in receipt of CAP Pillar 1 has ever been discriminated against based on gender.
However, any analysis of our farming industry will clearly show that it is male dominated, although this is slowly changing.
We believe the culture must change. Women that are currently in the sector have proven they are more than capable and exceling in the industry.
Women must feel equally respected within the industry. They can play a multifunctional role addressing the imbalance, which will result in positive outcomes for the sector. To incentivise farm succession to more females, it is imperative they are supported in the transition through CAP funding.
This is something that should be assessed and CAP funding, especially through Pillar 2, can be an important element in this.
Such funding could, for example, be used on an awareness campaign that can address any prejudices and inform acceptable behaviour.
ICSA believes there should be a specific focus on discussion groups and knowledge transfer, with a view to making them more female-farmer friendly.
KT is likely to be part of the next CAP.
ICSA suggests groups that have at least three female participants would get a higher payment for all members in the group.
Eligible female participants would include active farmers in their own right, but also partners, daughters or other relatives of participants.