Ireland ‘vulnerable’ without grants
The research has highlighted Ireland’s vulnerability in the upcoming reform of the Common Agricultural Policy. The investigation of decoupled subsidies revealed only Finland has a bigger share of agricultural output accounted for by subsidies.
Whereas subsidies are less than 10% of output in countries like the Netherlands, Italy, and Belgium, they are over 30% in Austria and Slovenia, about 50% in Ireland, and more than 60% in Finland (Romania and Bulgaria were not included in the research).
Across Europe, 83% of farms would continue to have positive income after removal of decoupled subsidies, but only 18% if the costs of their own labour and assets are taken into account.
In Ireland, researchers found the change would leave us with only 0.3% of farms with family farm income exceeding the opportunity costs of own labour and assets, and in a position to save money for farm investment. Half of Lithuania’s farms would still be in this category. Between 25% and 50% would still be in this category in Belgium, Estonia, Greece, Latvia, Luxembourg, and Poland.
Ireland would still have 64.6% of farms with “rather good” prospects; and 16.5% with negative income but scope to stay in business by postponing depreciation.
With decoupled subsidies gone, 11.6% of our farmers would have “rather bad” prospects, because postponing depreciation would not be enough to compensate for negative income, leaving them in financial distress.
According to the Dutch research, 7.2% of Irish farms already have negative incomes before CAP reform, and depend on off-farm income to stay in agriculture. They did not consider the impact of scrapping subsidies on rents, the price of milk quota and land, changing farmer numbers and acreages, nor the impact of subsidies still being coupled to production, especially in France and Spain.
They concluded farmers would be worst affected by losing subsidies in Britain, Sweden, Slovakia, and Denmark. The next worst affected would be Finland, Germany, France and Ireland.
