Farm Ireland

Sunday 21 April 2019

Ireland 'willing to introduce further capping of farm payments'

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Ciaran Moran

Ciaran Moran

The Irish Government is willing to introduce further capping of large EU farm payments and said plans to allow farmers to deduct labour costs would undermine such cuts.

Minister for Agriculture, Michael Creed told a meeting of his fellow Agriculture Ministers that the Irish Government is open to capping and that Ireland has introduced mandatory capping at €150,000 as part of the current Common Agricultural Policy.

However, Agriculture and Rural Development Commissioner, Phil Hogan warned that such an approach would undermine the commonality of the CAP and the level playing field between EU farmers.

Describing capping as a sensitive issue, Minister Creed said "we are willing to implement further capping but this must be done in a straight forward manner.

He said a key issue for Ireland is that proposals to deduct labour costs must be voluntary for member states.

He said Ireland considers that the deductions would undermine the proposals on capping and that it would also be cumbersome to administer. 

Minster Creed, however, did say that while Ireland is open to capping it believes policy imperatives mean the EU should not cap eco payments or payments to young farmers.

In its CAP reform proposals announced last year, the European Commission is proposing a reduction of payments above €60,000, with compulsory capping for payments above €100,000.

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This, it says, is designed to ensure a fairer distribution of payments, with the saved monies being used to fund small and medium-sized farmers.

However, the move has been slammed by some commentators and farmers, who say this claim is misleading and disingenuous, as it ignores what is likely to be the fine print in the Commission proposal.

The crux of the issue is that under the proposals the Commission says all Member States must allow for labour costs to be taken fully into account.

The effect of this proposal is that farmers receiving large payments can deduct the value of salaries or on-farm labour from the direct payments received before the cap is applied.

Yesterday's, Agriculture Council meeting debated a report on the state of play regarding key CAP proposals which summarises the work carried out on the planned reforms since January by Member State and Commission officials.

Under the new proposals, the wording to the regulation will change from 'shall' to 'may' which will allow Member States to decide whether to allow for labour costs to be taken fully into account when capping payments.

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