Farm Ireland

Saturday 16 December 2017

EU signals end date for historical regime

Leaked reform plans state flat-rate payment in store from 2019

Tea break: Larry O'Sullivan, his
dog Max, Con O'Driscoll and Pat O'Sullivan
take a break at the old-time threshing event
in Ardfield, Clonakilty, Co Cork
Tea break: Larry O'Sullivan, his dog Max, Con O'Driscoll and Pat O'Sullivan take a break at the old-time threshing event in Ardfield, Clonakilty, Co Cork
Darragh McCullough

Darragh McCullough

The EU Commission has, for the first time, suggested a deadline of January 1, 2019, for the ending of the current single farm payment (SFP) regime.

The details are included in a leaked draft of the EU's CAP reform plans.

While the text suggests that member states may continue to take historical factors into account to avoid financial disruption for farmers for up to one year after 2019, a flat-rate payment system based on either a national or a smaller regional basis will apply from this point.

The document puts flesh on the bones of Commissioner Dacian Ciolos's aims to phase out historical payments and link the payments to more 'greening' measures.

It now appears that farmers will be required to perform three mandatory measures that go beyond cross-compliance requirements, including crop diversification, the maintenance of permanent grasslands and a 5pc land designation to ecological purposes to qualify for a top-up on the basic farm payment.

Crop diversification will require farmers with tillage enterprises to have at least three different crops each covering more than 5pc of their arable land.

The ecological requirement will demand 5pc of farmland be devoted to buffer strips or left fallow. Only organic farmers will be exempted from this requirement. The document suggests that Ireland should set aside 30pc or almost €400m of the €1.3bn annual Single Farm Payment for these enviromental measures.

A progressive capping of SFP payments that exceed €150,000 has also been outlined. Farmers receiving more than €150,000 will pay a 20pc levy on all payments up to €200,000, 40pc on payments from €200,000-250,000 and 70pc on payments from €250,000-300,000.

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Payments will be capped at a maximum of €300,000. The progressive capping is designed to create a fairer distribution of payments but allowances will be made for the number of employees per farm.

Other details revealed in the leak include plans to scrap payments to farmers receiving less than €100 or with a holding of less than one hectare. This move aims to avoid an "excessive administrative burden".

Instead, the Commission wants a simpler lump sum payment to replace these direct aids. The document also wants national reserves to be maintained to provide funding for Disadvantaged Areas and to facilitate young farmers who are in the process of setting up their businesses.

More sensitive areas of the reforms, such as the definition of an 'active' farmer and the overall amount of funding that will be made available to each State, have yet to be clarified.

ICSA president Gabriel Gilmartin said that the proposals would allow for an important transition period from the historical to a flat-rate payment system. However, he added that there would have to be more clarity on the greening measures.

"The five percent ecological measure is a new concept and will need more debate," he said. "I would be concerned that it could be too bureaucratic."

Meanwhile, proposed changes to the financing structures for EU schemes have left the farm organisations on tenterhooks this week.

Initial reports that farmers might benefit from EU proposals to allow greater flexibility in the co-financing governing the multi-billion euro rural development fund have been completely scotched by all the main farming organisations.

Instead, they believe that the changes could open the door for the Department of Finance to reduce the amount contributed to schemes such as the Disadvantaged Areas Scheme and AEOS by the national exchequer by as much as €98m.

Indo Farming