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Thursday 18 October 2018

Opinion: Thirty years on from MacSharry, we need another CAP revolution

Ray MacSharry.
Ray MacSharry.
Sean Cleary, Michael John Mullins and Joe Glynn making a cock of hay near Tuam, Co Galway. Photo: Ray Ryan

Richard Hackett

For an agricultural consultant, the busiest time of year are the weeks leading up to the close of the Basic Payment Scheme (BPS) applications date on May 15.

It's the 'harvest' of an agricultural consultancy business, and needs to be planned well in advance.

The desk needs to be cleared of other projects that may take up valuable time for the main job at hand. You need to organise a succession of customers to provide sufficient time for each to correctly go through each application - preparation is the key.

Like any harvest, if you don't enjoy the busiest time of year, you're probably in the wrong business.

One thing that particularly struck me this year is the number of entitlement transfers that were required to carry out the applications.

The Department has an online system for entitlement transfers which is very efficient.

This is just as well as the number of entitlements that need to be transferred by lease, sale, inheritance etc is rising exponentially.

My opinion is that this demonstrates the increasing disconnect that is occurring between the historical production profile of Irish agriculture and where the industry is actually positioned.

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The current entitlement model can generally be traced directly back to the production output of a holding in the early 1990s, nearly 30 years ago.

The then EU commissioner for agriculture, Ray MacSharry, completely revolutionised the CAP. Before MacSharry, EU agriculture was supported just as strongly, even more so, than it is now.

The method of supporting EU agriculture at the time was focussed on supporting agricultural output prices using 'tools' like intervention storage, export refunds and aids to private storage.

How often do we hear comparisons of prices achieved for grain and for cattle today compared to 30 years ago?

While I'm not arguing for one second that real agricultural prices haven't dropped and continue to drop over time, it has to be borne in mind that prices of beef and grain 30 year ago, included what is now the basic payment, but operating in the background instead. So it's not really a fair comparison.

What MacSharry did was completely flip over the concept to allowing the market alone dictate output prices while farmer income was supported by direct payment for maintaining suckler cows, male beef animals, acres of cereals, sheep etc.

From then on, each successive 'CAP reform' has been an evolution of this simple idea.

I believe that 30 years on, the days of evolution of this idea are over. It's time for another revolution of the system. The current model of entitlements is a huge drag on the development of an efficient agricultural production system.

It is simply untenable that payments that were divvied out to those that were 'entitled' to receive money in 1993, would still be entitled to the same payment over a generation later.

Some producers expand, some producers contract, some producers exit the system altogether, other producers commence production. Very few stay the same.

Historically-based entitlements don't allow for this natural ebb and flow of production systems; in fact it directly acts against this natural process. The only pressure relief valve available is the transfer of entitlements which is a very blunt tool.

The CAP has a much wider remit now than it had in the time of the MacSharry reforms. It, quite rightly, has many issues under its wing: Food safety, protection of the environment, climate change mitigation, biodiversity, invasive alien species...the list goes on. But that is still no excuse to fossilise agricultural production in the way that is currently does.

The basis of the current Basic Payment System is that, in order to maintain eligibility, there must be a minimum of agricultural activity on land. In the main, that's not a problem. Normal production activity is well in excess of minimum requirements.

Under-production

However, there is an increasing cohort of land that is not even achieving basic activity.

The biggest non-compliance found during cross compliance inspection is not infringements due to over-production, it's infringements due to under-production: land eligibility and scrub encroachment.

In the midlands and west midlands, it's not unusual to see field after field covered in rushes. That's a new phenomenon. Thirty years ago, rushes were not allowed to proliferate as wildly, the land was needed to produce grass for animals to sell to make a living.

Now land needs just to be there to draw down payments. The west midlands was always wet heavy land. But that used to mean you had to work harder to maintain agricultural output, not less. That's a direct result of the CAP -erstwhile productive land not now producing. That's the legacy of the current CAP model and that has to change.

Richard Hackett is an agronomist based in north Co Dublin and is a member of the ITCA and ACA.

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