Farm Ireland

Friday 23 February 2018

New SFP will hit finishers hardest

Incomes of full-time cattlemen would fall 10pc under flat payment

Majella O'Sullivan

Majella O'Sullivan

Full-time farmers finishing cattle have the most to lose if the Single Farm Payment (SFP) moves to a flat area-based system.

Research carried out by Teagasc reveals that drystock farmers stand to suffer a 10pc drop in income -- a total of €37m -- under a new system that's not based on the reference years.

It also shows that a flat area-based system could favour part-time farmers and would result in a shift of €52m from full-time to part-time units.

Tillage farmers stand to lose an estimated €13m in their payments -- the equivalent of a 6pc reduction in farm family incomes.

However, the report by researchers Liam Dunne and Ultan Shanahan indicates that cattle-rearing systems, mainly those producing suckler weanlings, stood to gain €36m, with a consequential increase in income of 16pc.

The other winners are sheep farmers, who would benefit from a €28m boost equal to an 11pc increase in their earnings.

The study, which was based on a random sample of more than 1,100 Irish farms in the Teagasc National Farm Survey, shows that a complete shift to a flat area-based payment would not result in SFP or income gains.

However, there would be "substantial transfers" of SFPs and income between individual farms and farm enterprises.

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Economist Mr Dunne, one of the report's authors, said: "What we're trying to emphasise is that this is up for review now and we better start thinking about what we're going to do.

"The whole emphasis now is on the public good and not production, and it's very hard to see the evidence for this [public good] in the current system."

He said that his research clearly showed that a change in the basis for payment would suit those who are not farming too intensively.

"If you're on marginal land you could also do better, and the redistribution will shift towards less intensive farmers and probably those with poorer land.

"The cattle sector will definitely lose money but there will also be a redistribution within that sector from fattening cattle towards sucklers.

"We need to get our thinking caps on. It's not sufficient just to defend the existing system. Here are the consequences of what's involved.

"If we can't defend what we have, and if we're not able to defend it, we'd better have another system up our sleeves, and it's time to start thinking now what should be in that," he insisted.

The research also indicates that dairy farms with another enterprise may lose €9m in SFPs, equal to a family farm income reduction of 4pc.

Specialist dairy farms will be at a loss of €5m, equal to an income reduction of just 1pc.

There would also be a regional impact, with incomes transferring from inland counties to border and coastal areas.

Irish Independent