Member States could get say in the introduction of salary 'loophole' for capping farm payments

Ciaran Moran

Ciaran Moran

A meeting of European Agriculture Ministers next week will discuss a proposal allow Member States to decide whether or not to introduce a controversial salary deduction when capping large farm payments under the proposed reforms of the Common Agriculural Policy (CAP).

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.

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.

The Department of Agriculture in Ireland has voiced concerns over the proposal to deduct salaries.

Assistant Secretary, Colm Hayes told a recent meeting of the Joint Oireachtas Committee on Agriculture that it will create an unnecessary and significant administrative burden on member states that goes against the spirit of modernising and simplifying the CAP.

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"If we must start factoring in individual P60s, P45s and all sorts of other factors, it will bring about a complexity nobody wants to see."

However, next week's Agriculture Council meeting will debate a report on the state of play regarding key CAP proposals which summarises the work carried out on the planned reforms since January 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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