Around 200 farms to be affected by €100,000 CAP limit

Around 200 farms to be affected by €100,000 CAP limit

Just under 200 Irish farms will be affected by one of the main proposals to reform the EU’s Common Agricultural Policy which will set a cap of €100,000 on payments to farmers.

Research by the Oireachtas’ Parliamentary Budget Office shows the proposed introduction of a €100,000 ceiling from 2020 has the potential to directly impact on only 199 out of more than 124,000 Irish farmers who received payments under CAP.

However, they are threatened with losing more than €6.6m in income each year under the proposed reform of CAP, with an average annual reduction of €33,211.

Half of the total is accounted by farmers from five counties: Cork, Meath, Wexford, Tipperary and Kildare. They include 27 farmers based in Cork who are set to lose more than €1.1m in income — an average of €40,994 each.

There are also plans to allow individual EU states to lower the level of subsidy to farmers receiving over €60,000 per annum in direct payments from the EU. 

The main aim of the proposal which will see the overall CAP budget reduced by at least 5% is to cut the size of financial supports to the EU’s largest farmers. It comes after figures showed that 20% of farmers received around 80% of direct payments under the previous reform of CAP introduced in 2013.

Only 1.4% of Irish farmers get payments over €50,000 but they account for almost 10% of all such payments.

The research shows that more than 40% of all payments go to less than 12% of farmers while almost 70% of all farmers receive less than €10,000 per annum from the EU.

Ireland received €1.54bn under CAP last year (2.6% of the entire CAP budget) of which €1.2bn was in direct payments to farmers.

It is estimated that the impact of Brexit with the loss of the UK contribution will reduce the annual CAP budget, which was €58.9bn last year, by around €3bn.

The figures show 80% of CAP funding for Ireland goes towards direct payments to farmers. Irish farmers are heavily dependent on EU subsidies with 56% of average family farm income coming from direct payments from CAP funds.

The figure ranges from 22% for dairy farmers to over 100% for farmers rearing cattle and sheep.

“A dependency that is over 100% of income indicates that this sector is economically vulnerable and is trading at a loss,” the report said.

Several counties including Leitrim, Longford, Sligo, Donegal, Westmeath and Laois are almost entirely dependent on CAP direct supports for income.

The latest figures show average family farm income in Ireland is €31,442 of which CAP contributes €17,569. It compared to the national average wage of €37,646.

There are also regional variations in dependence on EU subsidies with farmers in Connacht and Ulster entirely dependent on CAP payments compared to 83% of farmers in Leinster and 65% of farmers in Munster.

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