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Capping of payments a possibility in reforms

The capping of direct payments to individual farmers and the introduction of mandatory environmental measures are among the most radical elements included in a leaked Commission communication on CAP reform.

The paper, which has been seen by the Farming Independent, seems to rule out the imposition of a flat rate single farm payment (SFP) across the EU but states that a "more equitable distribution" of the CAP budget is needed.

The proposals suggest that an "upper ceiling" should be introduced for direct payments to individual farm enterprises so as to "improve the distribution of payments among farmers".

The document states that allowance would be made for large farm enterprises which provide high employment.

However, the level of any payments ceiling or how it would be calculated are not set out in the paper.

Due to the loss of employment opportunities in many rural areas, the paper proposes that small farmers should receive a minimum level of direct payments.

The SFP is expected to include a basic payment to serve as income support. There would also be an additional top-up for specific and mandatory environmental measures.

This "greening" component would require farmers to take annual agri-environmental actions. These could include a number of options such as crop rotation, ecological setaside or the use of green cover.

Worryingly for Ireland, the document calls for Disadvantaged Area payments to be moved from Pillar II to Pillar I.

This proposal has been rejected by the IFA, which claims it would undermine the measure and dilute its value.

The possible retention of coupled payments for specific sectors has been given the green light. The document states that this support, which could be co-financed by national governments, would have to be based on fixed areas, yields or livestock numbers and would only be allowed within clearly defined limits.

A commitment in the paper to simplify cross-compliance rules will be welcomed by the farm organisations. This is to be achieved by providing farmers and administrators with a simpler set of rules.

The need for strong market management tools is also recognised, although it needs the instruments in place to be streamlined and simplified.

The proposed adaptations include the extension of the intervention period and the use of disturbance clauses and private storage for other products.

On the issue of SFP calculations, the Commission appears to accept that imposing a flat-rate subsidy across the EU would not reflect the different cost structures in member states.

However, Commission officials insist that bridging the gap that exists between the average payments (per hectare) from one member state to another will be a priority.

One proposal mooted is that member states would get a guaranteed percentage -- possibly 75-80pc -- of the current EU average SFP of €215/ha.

For a country such as Romania where farmers get an average payment of €31/ha, this would be a major boost. However, such a move would have to be financed by cutting payments to western EU members.

Further reaction page 16, comment page 4

Irish Independent