EU ministers in crunch talks on changes to farm payments

The most vital negotiations for years on the future of EU payments for farmers begin this morning in Brussels with member states going head to head on the €400bn budget.

Ireland has secured €1.5bn a year for agriculture or €11bn over the seven-year period of the CAP. Overall, despite massive pressure to reduce the proportion of the EU’s budget that goes to agriculture, the final cut was 3% compared to a proposed 7%.

The meeting will be chaired by Agriculture Minister Simon Coveney who says he hopes the outcome “will protect agriculture and the agri-food industry as the most important contributor to the Irish economy, reaffirming its status at the heartbeat of rural Ireland”.

The agreement reached on the overall EU budget last month nailed down the distribution between member states and also agreed the formula for the distribution of direct payments, or pillar 1, between member states as originally proposed by Ireland. Mr Coveney acknowledged that this has resulted in a relatively favourable outcome for Ireland.

The result is that direct payments ceiling remains at around €1.2bn a year with a relatively small cut to allow extra for new member states and the overall budget cut.

The next decision will be the distribution of direct payments between farmers. The commission has proposed moving to a flat-rate system which for Irish farmers would mean significant transfers between farmers.

Mr Coveney said he is concerned that moving to a flat-rate system “would be harmful for the Irish agricultural sector and the Food Harvest 2020 strategy”. However several countries, including Germany, are happy with this new system.

Mr Coveney has put forward a half-way system that he estimates would see a minimum of €74m transferred, with flexibility to transfer more if needed, compared to the flat-rate system that would see about €280m transferred.

He got some support for this more flexible approach.

Apart from the overall implications for EU policy, the reality for Ireland, according to Mr Coveney, is that on the one hand are farmers on low payments per hectare who want a larger share of funding but this would be at the expense of farmers on higher payments who have invested in improving their farms.

The other big issue to be resolved is the greening payment and the criteria as proposed by the commission which has broad support.

Ireland would like to see the greening payment as a percentage of a farmer’s overall payment rather than a flat rate, and the need to adjust the three criteria to suit Irish farming conditions, said Mr Coveney.

To get agreement is expected to take two long days and possibly two long nights — and then the Irish presidency will have to square the circle with the European Parliament before the new CAP policy is finalised — possibly in June.


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