Farm Ireland
Independent.ie

Friday 19 April 2019

EU Agri Committee vote in favour of 100pc convergence of CAP payments

(stock photo)
(stock photo)
Claire Fox

Claire Fox

The EU parliament’s Agriculture Committee has voted in favour of 100pc convergence of payments under CAP Post 2020 reforms.

Fine Gael MEP and Vice President of the European Parliament Mairead McGuinness stated this morning that the result of the final vote on Pillar One of CAP reform was 27 members in favour, 17 against.

MEPs had a straight choice between 100pc or 75pc convergence in payments to the national average.

They voted that all per ha direct payments within their territories reach at least 75pc of their average direct subsidies by 2024 and 100pc by 2027.

The push for 100pc convergence was backed by the Greens and left-leaning GUE/NGL coalition, of which Luke 'Ming' Flanagan is a member.

Proposals from Agriculture Commissioner Phil Hogan proposed to limit convergence to 75pc of the national average - a position supported by the European People's Party to which Fine Gael is aligned.

Both the IFA and ICMSA had warned that further convergence - Ireland moved to 60pc of the national average during the current CAP - would seriously undermine the viability of farmers in low-margin enterprises such as drystock and tillage.

Other suggested changes, voted in favour of today by MEPs, included that Member states should be obliged to cap annual direct payments to farmers at the level of €100.000 but they may allow farmers to deduct 50% of agriculture-related salaries, including taxes and social contribution, from the total amount before the reduction.

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Further, at least 5pc of national direct payments envelope should be allocated for complementary redistributive income support to small and medium-sized farmers (maximum 65pc top-up per ha). States using more than 10pc of their direct payments budget for this support scheme, may decide not to apply the capping mechanism at all, says the adopted text.

EU states should use at least 2pc of their direct payments budgets to support young farmers, the MEPs also voted.

The per-ha top-up should be granted for the first seven years after the application. Further support could be granted from the rural development funding and member states could support young farmers’ investments, including land purchase, as a priority, MEPs say.

Convergence

On convergence, Mr Flanagan, who is an MEP for the Midlands NorthWest, maintained that it was not "rational or equitable to have farm support payments based on historic criteria two decades old".

"In terms of defending the CAP budget going forward, it is not credible or defensible to the public that in 2027 we will be paying farmers based on their activities in 2002," he said.

The Roscommon-based MEP also took aim at claims that the most productive farmers received the highest payments.

"Data [from the Department of Agriculture] shows that despite payments ranging from €100/ha to €1,000/ha, there is only marginal difference in stocking rates. When looked at through the lens of output per euro received, it is clear that those on lower payments are in fact the most productive," he argued.

However, Fine Gael MEP, Mairead McGuinness, cautioned that "those who paint convergence as simply taking from the rich to give to the poor ignore the complex reality at farm level".

While accepting that many farmers on low-value entitlements will benefit from such a move, she said farmers who have only a small number of entitlements above the average level, but whose total payment is small, will lose under full convergence.

"I am also concerned about the unintended consequence of convergence where full-time farm families with above-average entitlement value will lose money, while land owners with significant off-farm income will gain at their expense," Ms McGuinness said.

In a recent letter to the Agriculture Minister Michael Creed, Ms McGuinness called for an impact assessment to be carried out on full convergence on family farm income and output and a detailed analysis of the changes in family farm structures.

The minimum CAP payment has increased to €160/ha during the current CAP regime. Full convergence to the national average would be worth an additional €70-75/ha for farmers with low-value entitlements, while 75pc convergence would be worth an extra €40/ha.

The IFA claimed the 60pc convergence applied in the current CAP programme had a "huge negative impact on those with relatively modest farms" and "disproportionately impacted" on the livestock, sheep and grain farmers who had built up the payments to compensate them for low commodity prices.

While the IFA said it supported the concept of 75pc convergence, it insisted that it must be funded through "upwards only convergence".

In a letter to the Agriculture Minister Michael Creed, Ms McGuinness called for an impact assessment to be carried out on full convergence on family farm income and output and a detailed analysis of the changes in family farm structures.

The minimum CAP payment has increased to €160/ha during the current CAP regime. Full convergence to the national average would be worth an additional €70-75/ha for farmers with low-value entitlements, while 75pc convergence would be worth an extra €40/ha.

The IFA claimed the 60pc convergence applied in the current CAP programme had a "huge negative impact on those with relatively modest farms" and "disproportionately impacted" on the livestock, sheep and grain farmers who had built up the payments to compensate them for low commodity prices.

While the IFA said it supported the concept of 75pc convergence, it insisted that it must be funded through "upwards only convergence".

Online Editors