Debate on SFP will grow

The announcement that Kerry Group will create up to 900 jobs in Kildare within three years provided the ideal backing for the estimated 20,000 farmers demonstrating in Dublin on Tuesday.

It was described by Agriculture Minister Simon Coveney as perhaps the most significant investment ever in the Irish agri-food industry, and proof the sector can be central to rebuilding the economy.

What better acknowledgement could the IFA have hoped for, as they warned that their most productive farmer members could lose out due to cuts and changes in the EU’s Common Agricultural Policy?

It spoke volumes to the ordinary citizens who farmers need on their side.

However, there was a downside to the Day of Action.

It laid bare the reality that farmers are trying to protect the closed shop arrangement of a €1.2bn-a-year single farm payment (SFP) distributed according to the economic activity of each farm between 1999 and 2001.

Fintan O’Toole in The Irish Times said: “If you had a vast ranch in 2001, you’re still getting vast subsidies now; and it skews the entire system towards the best-off farmers — broadly, the more money you have, the more the EU will give you.”

An Taisce said the flat rate system which the IFA — and Mr Coveney — is trying to fend off is the single most important reform to help Ireland maintain population in peripheral counties, to protect and develop tourism across the West and North, and to help stem the tide of regional imbalance which almost washed Ireland to the east in the Celtic Tiger years.

Friends of the Irish Environment said flat rate would be “a salvation for the farmers on disadvantaged lands in rural Ireland — 70% of Ireland’s farm land”.

Nevertheless, what will stay with most people is that farmers marched in Dublin on the same day as the agri-food industry came up with 900 jobs.

It may have been just as well to get the political bombshell that is historical versus flat-rate SFP out in the open.

Debate on that is bound to heighten as the CAP reform process continues.

As far back as last autumn, Mr Coveney was warning that the European Commission plan for flat-rate single farm payments in Ireland would spark a civil war.

Commenting on this week’s IFA protest, European Commission agriculture spokesperson Roger Waite pointed out that young people in Ireland can’t get into farming because of the historically-based SFP. He was “absolutely adamant” on moving away from the current Irish SFP based on past production towards a flat rate per hectare, “with some flexibility”.

Instead of relying on the SFP, farmers who work the hardest should “get their reward from the market”, Mr Waite said.

What he envisages is about 76,000 Irish farmers getting an 86% bigger (on average) SFP, while around 57,000 lose 33% (on average).

As far as Mr Waite — and the average Irish citizen — are concerned, that would make most farmers better off.

And they would be delighted to take from the top 10% of Irish farmers who get 37% of the national SFP to give to the farmers at the other end of the scale. No tears would be shed for the two biggest earners, Larry Goodman’s Irish Agricultural Development receiving more than €500,000, and Kepak, getting nearly €350,000. A flat-rate payment to farmers from the EU for every hectare that’s being farmed seems simpler, fairer, and more transparent to most people.

Responding to Tuesday’s protest, An Taisce said it will be a sad day if Ireland’s agriculture minister does not go to Brussels with the aim of delivering flat payments.

But the minister knows a flat rate would hugely dislocate the production of raw material for €9bn of food exports by food companies like Kerry Group.

Production of cattle and sheep would fall because livestock farmers depend on the existing SFP to subsidise their farming. The 57,000 whose SFP would be reduced would have to cut back farming due to the ever-present risk of loss-making years that could eventually bankrupt them. Or they would need processors to raise cattle and sheep prices considerably — if processors can afford it.

It could take a flat-rate compensated Irish agriculture sector years to recover lost production, requiring the 76,000 farmers insulated by higher SFPs to increase their livestock carrying capacity.

The reality was well put by Friends of the Irish Environment in their reaction to the IFA Day of Action: “The public is not aware of the stark reality of the fact that it is they who are paying to support a current loss-making sector. Without CAP payments, Irish agriculture would have made a loss of €800m in 2010, up from €600m in 2009.” But if they are concerned about agri-food’s role in economic recovery, be it at their peril that they tamper with the existing SFP system.

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