Farm Ireland

Sunday 25 February 2018

Calls for a 'systematic reduction' in direct payments to farmers

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Ciaran Moran

Ciaran Moran

A new report on reform of the Common Agricultural Policy (CAP) has recommended direct payments to farmers should be systematically reduced.

The report published by the Rural Investment Support for Europe Group shows how the current CAP does not make best use of the considerable resources deployed to support land managers through the necessary transition. 

It says the largest instruments of the CAP, the Pillar 1 direct payments, which account for over 70pc of CAP funds are ineffective, inefficient and inequitable. 

It is suggested that these direct payments should be systematically reduced and resources switched to provide targeted assistance, including transitional adjustment assistance to help farmers adapt and rise to the specific challenges of improving productivity, resource efficiency and risk management and to pay farmers to provide specific environmental and other public goods.

According to the report's authors, including Irish Economist Alan Matthews, in the context of over-stretched resources especially soil, water and biodiversity, changes in climate which impair agricultural production, and greater volatility in farming conditions, it is essential that Europe’s Common Agricultural Policy (CAP) is further adapted.

“The status quo is unacceptable.

“The CAP must be modernised to help EU farming become a better-structured industry which is economically viable and environmentally sustainable.

“Indeed, agriculture has a crucial role to play in addressing the UN Sustainable Development Goals and ensuring that European Union lives up to its commitments to these goals,” it says.

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The report argues that the two principal aspects of the CAP requiring the most attention are land management and risk management.

Where land management is concerned, the greatest worry is that the current environmental standards are not being met.

The report therefore proposes a redesigned, more integrated tiered structure of supports with clearer targets on the environmental outcomes sought.

The core issue concerning risk management is that the present approach in the CAP towards market orientation has not gone far enough.

 Indeed the sheer scale of direct payment inhibits farmers from better mitigating the risks they face. 

The report outlines the full range of instruments that are most appropriate for managing risk at the farm level, market level and nationally at times of catastrophic risk.

Finally, following the lessons that have been learnt from previous successful reforms, the report suggests some procedural changes to kick-start a more effective reform process which brings together more constructively the conflicting interests in agricultural policy.

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