Farmers face into a year of transition

THIS year will be one of transition for the country's 130,000 farmers, following radical reform of the Common Agricultural Policy.

IFA chief economist Con Lucey said the single biggest issue is the preparation for the switch to the single farm payment.

The greatest potential problem is the 100% land link requirement, particularly in the case of the 45,000 farmers who have land rented-in.

Other key issues include the problem for dairy farmers who have a 2000-2002 base for land, but a 2005 base for quota.

Hardship and special cases, farmers with low entitlements, and the need to keep cross-compliance as simple as possible are other important issues.

Mr Lucey said traditional CAP price supports, intervention and export refunds are being wound down across all supported sectors.

In the dairy sector, the level of support prices are to be cut by about 20% over three years starting in 2004, with only 60% compensation.

Producers with high costs will be under extreme income pressure.

While most are expected to stay in production until 2005 to secure their decoupled payment, an accelerated exit from dairying is anticipated from 2006 with consolidation by those remaining in production.

The probable changes are in terms of fewer and larger dairy farms, more part-time farming in the drystock sectors, and the consolidation of a core of full-time commercial farms who will supply most of the raw material for the food processing sector.

Mr Lucey said that the IFA will be insisting on adequate appeals mechanisms by the Department of Agriculture and Food before individual entitlements are finalised, as clearly the single farm payment will be the mainstay of farm incomes for the next decade. Mr Lucey also said high costs at processing and marketing level can no longer be tolerated, and the industry must respond to the new situation.

The product mix must also be tackled, as there is no future in producing butter for intervention, he said.

Mr Lucey said that the IFA's priority in the context of the national partnership agreement Sustaining Progress, will be to ensure that the new REPS scheme and new farm grants scheme are fully taken up and implemented by the Department.

With the Nitrates directive being implemented in 2004, these measures are vital to the survival of commercial farming in Ireland, he said.

Mr Lucey said the local elections in June will also provide the IFA with an opportunity to raise certain local problem issues such as planning, charges for new houses and forestry, and environmental management.