Farm Ireland

Saturday 18 November 2017

John Shirley: We have a chance to influence CAP reform -- we should take it

SHEAR CLASS: George Graham shears 450 sheep
for Michael O'Gorman of Dunroe, Bagenalstown, Co
SHEAR CLASS: George Graham shears 450 sheep for Michael O'Gorman of Dunroe, Bagenalstown, Co Carlow

John Shirley

I worry that Ireland is sleepwalking into the new regime for the Common Agricultural Policy (CAP). Time is moving on and we're not hearing a lot either from Government or farmers on the issue.

If ever we needed reminding of the importance of the Single Farm Payment (SFP) to Irish drystock farming, it came with the Teagasc National Farm Income Survey for 2011. On the back of record high beef prices in 2011, cattle farmers still lost money. On average their actual farming business lost approx €2,500 per farm. When the SFP and other payments were added, the average cattle farmer income was just under €11,000.

Why do cattle farmers continue to subsidise production with their SFP?

Many are not doing the sums and don't realise what's happening. For others keeping cattle is a lifestyle choice as much as a business.

But should the flat rate area based SFP, as proposed by EU Farm Commissioner Dacian Ciolos, be implemented, Ireland's cattle industry and cattle farmers face a shock.

Any serious Irish beef farmer getting his/her family income from the business, is on a much higher SFP than the flat rate of €270/ha which would follow from the Ciolos proposal. And that €270 has a lot of strings attached.

Let's look at the Ciolos proposal.

Under his complex proposals, the Single Farm Payment will be divided into a number of elements. The new regime is to begin in 2014 and will continue to evolve until 2019 with a 40pc shift in the first year. The main elements of relevance to Ireland are:

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nA basic payment.

nGreening measures, which will amount to 30pc of the total, but conditions for this have yet to be agreed.

nA reserve for young farmers amounting to 2pc of the total.

nA voluntary reserve for disadvantaged areas under natural constraint up to 5pc of the total.

nA voluntary coupled payment for vulnerable sectors of 5-10pc of the total.

nTillage farmers must grow three crops with no more than 70pc or less than 5pc of the total area grown.

n7pc of land other than grassland must be devoted to an ecological focus area, which in Ireland's case could include features such as hedges.

They are still talking about 2014 being a reference year for area, but applicants must have been claiming SFP in 2011.

There will be winners as well as losers under the Ciolos plans. There is scope for payment regionalisation, both on economic and geographic grounds. Aidan O'Driscoll is the senior negotiator on CAP reform in the Department of Agriculture. He has said that under the Ciolos plan, 76,000 farmers would gain on average 86pc over current payments while another 57,000 would lose an average of 33pc.

Earlier this year the IFA estimated how payments could pan out for some higher and lower SFP recipients. The accompanying tables (below) show how €500/ha could drop to about €280/ha and €100/ha could be lifted to €240.

Is the fact of potential winners exceeding potential losers having an impact on political criticism? Agriculture Minister Simon Coveney at one stage talked of limiting the individual farmer cuts to 15pc, but he no longer stands by this.

This time around, the EU Parliament has co-decision on CAP reform with the Commission. Last week a document from rapporteur MEP Luis Capoulas Santos suggested that convergence be delayed until after 2019. His report also contained a suggestion that individual reductions be held at 30pc and that there be scope for 20pc variation within each State.

The Portuguese MEP also called for some modification of the greening measures. But when MEPs deliberate on CAP reform later this year, there is no doubt they will be at one with the Commission on insisting that future payments contain greening measures.

MEPs, member states and farm organisations will all be aware there is still no agreement on an overall EU budget post-2013 and that this could impact hugely on any CAP regime.

There may also be a certain weariness about Member States contributing to the EU and even questioning of the ethos of the CAP regime.

Maybe this is why our Department and farmers are keeping their powder dry about coming up with their own alternatives to the Ciolos proposals.

On the other hand, global food security is now an issue. Closer to home, livestock farming is crucial to our own economic survival. We should be pulling out all stops to get CAP reforms tweaked to support productive farming, and especially livestock farming in Ireland.

My suggestions include:

• Reintroduce a suckler cow premium and a ewe premium, but without a quota. The fund for this would be financed by shaving the 10pc off the national envelope, which is already proposed. I would also shave 25pc off the tillage entitlements. The future for arable farming looks bright and there is already a French precedent for using arable payments to support sheep farmers. I would add in the cash from 'stacked entitlements' since the last reform. Whatever about justifying the retention of historical payments, I would find it hard to justify holding on to payments which have been stacked since the last reform.

• Abandoning 2014 as the reference year and replace it with an average of 2010 and 2011.

• I would also like to see the greening measure abandoned altogether as it will bring huge complexity to the SFP. Ireland is already mainly grassland in well hedged fields.

Drystock farming in Ireland may leave small reward for those at the coalface but Ireland Inc needs it. Tweaking the CAP reforms to support our beef and sheep sectors is in the national interest.

The argument about WTO compatibility has surely passed its sell-by date. The issue is world food security as it was when the EU was established. Ireland is due to take over the EU presidency from Cyprus on Jan 1, 2013. We are in a unique place to influence the CAP reform. Let's go for it.

Indo Farming