Economist says €60k cap on farm payments ‘will not happen’ due to loopholes
In proposals, announced last month on reform of the Common Agricultural Policy (CAP) which need to be approved by member states, EU countries will have to cap subsidies for large farms — with the Commission suggesting a limit of €60,000.
Agriculture and Rural Development Commissioner Phil Hogan said that the savings generated from this capping can be redistributed to smaller farmers.
This, he said should serve to further mitigate the impact of a proposed 5pc cut to the CAP budget on the incomes of the small and medium-sized Irish farms.
However, leading Agricultural Economist and a Professor at Trinity College Alan Matthews has slammed such statements as misleading and disingenuous, because they ignore what is likely to be the fine-print in the Commission proposal.
In a paper on the issue, Matthews said that this proposal is unlikely to achieve its intended objective.
He said a leaked draft of the Commission’s legislative proposals requires Member States to first deduct the value of salaries paid from the direct payments received before the cap is applied.
Indeed, he says the leaked draft further proposes to extend this loophole to also include the imputed value of own family labour engaged on the farm.
“The effect of these loopholes makes capping meaningless.