Farm Ireland

Thursday 22 March 2018

Teagasc refuse to be drawn into coupling debate

Declan O'Brien

Declan O'Brien

ICSA claimed yesterday that Teagasc's analysis of the various CAP options reaffirmed their view that coupling of payments would not improve the viability of the suckler sector.

Teagasc's submission on CAP reform was outlined by the State body's economic unit FAPRI to the main farm organisations yesterday.

The FAPRI submission pointed out that the maximum fund available for coupling would be around €101m. This would be made up of €97m from Pillar I and a maximum of €4m from Pillar II.

Under the CAP package, just 15pc of Pillar II funds can be transferred into Pillar I. In Ireland's case this equates to €47m. However, just 8pc of this €47m, or €4m, can be used for coupling, FAPRI maintained.

This is at odds with the IFA plan for a €144m coupling fund, €36m of which would come from Pillar II.

The FAPRI submission accepted that introducing a coupled payment for the suckler sector would help maintain beef cow numbers but the benefits for overall beef production would be hard to quantify.

It looked at the possible impact of various scenarios in terms of the choices on CAP reform that are open to the Department Of Agriculture. However, Teagasc shied away from becoming involved in the increasingly heated debate on coupling.

In answer to the question of whether or not it made economic sense to introduce an 8pc coupled payment, Teagasc said it was not the role of the organisation to tell the Department what to do.

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But the FAPRI document stressed that any coupled payment would have to come out of Ireland's €1.2bn single farm payment (SFP) envelope and this would mean reductions for all farmers in their payment, no matter what their enterprise.

While FAPRI said the introduction of a coupled payment would be positive for suckler farmers, they pointed out that it would have negative implications for all other sectors if the coupled payment was limited to sucklers.

According to Teagasc's figures, a €101m coupling fund limited to the suckler sector would deliver a payment of around €90/hd on the 1.1m beef cow herd. However, if the payment was extended to include ewes, the payment would fall to €60/cow, with ewes getting less than €10/hd.

In terms of the 60pc minimum payment, FAPRI found that this move would result in a net gain for 48pc of SFP recipients, with around 10pc being largely unaffected, while around 42pc would suffer a loss.

In general terms, FAPRI found that the CAP reforms would be good for the majority of cattle rearers. It would lead to improved payments for up to 70pc of sheep farmers, while beef finishers were split 50/50 in terms of winners and losers.

The big losers from the package were dairy and tillage farmers, the Teagasc unit found, with close to 75pc of both groups suffering SFP losses.

Irish Independent

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