Moving towards a market-focused system
Farmers have been given an estimate of how large or small their EU entitlements will be under the scheme which goes into effect on January 1, 2005.
This is the single biggest reform of the Common Agriculture Policy (CAP) since the MacSharry reforms in the 1980s.
Long term, the pessimistic view is that Franz Fischler has written a retirement package for Europe’s farmers who will be out-produced in many areas of agriculture by the rest of the world where market forces will dictate price.
A statement from the Department of Agriculture and Food said more than 122,000 farmers would get notification this week of payment which would total 1.322 billion each year.
On average, Irish farmers will be paid 10,000 each, based on what they were paid in 2000, 2001 and 2002 by the EU. The first of the Single Payments will be made in December next year.
However the average payment is no real measure of who wins and loses.
It has been speculated that beef baron Larry Goodman will be a huge beneficiary as will Dawn Meats, both being major producers of beef cattle in their own right.
Up to 30,000 farmers have not been sent the department’s letter. Some are tied up in appeals about their payments over the previous three years, while others are new entrants to farming or have inherited farms.
A low-cost telephone help line has been set up to answer farmers’ queries.
The Department of Agriculture and Food will also have information booths at its stand at the National Ploughing Championships at the end of the month near Tullow in Co Carlow.
For farmers, the single payment system is radical in a number of ways.
In the past many were forced to produce simply to reap the benefits of the various schemes meaning Europe was continuing to produce more than was required.
The Single Payment system is designed to get rid of the bureaucracy and to gear production to the market.
The latter aim is the most radical in its implications and could reduce the number of full time farmers dramatically. Whatever the final outcome, this move by Fischler and the EU is set to forge even greater change across the whole of European agriculture.
As it stands, up to 60% of all farmers are classified as part time.
Viewed in a positive way, the shift in emphasis means producers can now gear their production to meet the markets and not the EU.
For many with no one to inherit the farm it will allow them to scale down their involvement and live without too much effort into their old age.
However the shift to market driven demand opens up the prospect of ranch farming where the declining interest in agriculture will allow big production units to emerge as the most progressive farmers snap up land that becomes available over time.
A word of warning however: This single payment system is set to run until 2013.
Now that the EU has expanded to 25 member states added costs have come into play, putting greater funding pressures on the entire system. With the German economy under pressure and the additional funding burden it is far from certain the Germans, in particular, will agree to fund it for the full term.
Ireland was in a minority in opting for the full decoupling option. It protects farmers from changes that will undoubtedly be forced on the EU as the world moves to freer less subsidised markets. Also, this payment is not indexed linked so that by the end of the eight year period its value to recipients could be significantly eroded.
Depending on circumstances this shift paves the way for a totally market focused system of agriculture.
