EU farm chief aims to cut production, says IFA
John Dillon, IFA's president, speaking at the Kerrygold Dublin Horse Show, said it is important to realise that if Irish agriculture is wound down which is the objective of the "decoupling" proposal there are serious knock-on implications for Ireland's rural economy.
IFA's analysis is that the CAP review proposals would reduce the volume of output in the sectors affected by over 20%, equivalent to 355m annually, and the income loss in the total agri-food sector would be close to 300m annually.
Mr Dillon said lower agricultural production means a reduced demand for farm inputs and services, and less raw material for the food processing industry.
"At a time when rural Ireland is already under pressure, if 300m of spending power is taken out of the rural economy, it will have a major impact on jobs and on the viability of our rural towns and villages. We estimate that it would mean 19,000 lost jobs in rural Ireland," he said.
Mr Dillon said the Fischler proposals are a particular attack on farmers who are trying to produce beef, lamb and grain on a committed and commercial basis.
"These farmers were just coming to grips with the requirements of the Agenda 2000 changes, but the Commission is now proposing the most radical of reforms to the CAP in its decoupling plan. It must not be forgotten that committed farmers are the mainstay of a modern Irish food industry and the main customer of the farm inputs and services sectors," he said.
The IFA leader said decoupling is an insidious plan because it may appear to some people to be positive but its purpose is to cut farm output. This might be acceptable in other member states but in Ireland agriculture is still important to the rural economy.
"The Fischler proposals are not the end of the CAP reform agenda. The likely longer-term agenda of the Commission, in decoupling support from production, is to prepare the road for further winding down of direct payments over time."
Mr Dillon said the Agenda 2000 CAP Reform was agreed to run to the end of 2006. Such a fundamental new reform as now proposed by Commissioner Fischler is not justified by the current market and budget situation in the EU.
"The Irish Government must reject the proposals on two grounds. They are not necessary, and they are bad for the Irish economy," he said.
IFA chief economist Con Lucey said it estimates that the annual income loss at farm level would be about 150m due to a combination of output loss on suckler and sheep farms, the 20% cut in direct payments, and the cereals price cut.
"The likely impact of decoupling would be a 35% cut in the national suckler cow herd, a 32% cut in the national ewe flock and a 35% reduction in cereals production. The loss in terms of national agricultural output is estimated at 355m annually," he said.
Mr Lucey said that while the Commission argues that the budget savings from the direct payment cuts would be used to fund "rural development" measures, the IFA view is that at least one half of the loss would not be restored for three main reasons.
These are: a "prosperity clause" contained in the Fischler proposals, which could militate against Ireland; the existing high uptake of the CAP rural development measures in this country; and, the extra cost to farmers in the case of some proposed new measures such as animal welfare and the farm audits.
