CAP amendments should benefit all
So says Macra na Feirme in its policy paper on the future shape of CAP.
To critically appraise this point, there doesn’t seem to be any obstacle at present preventing any farmer no longer interested in farming from making the farm available to others, through renting, leasing or share farming.
The paper doesn’t go any further in explaining issues for farmers wishing to release their land, suggestions on how to remove any obstacles, nor offer farmers encouragement to “release” their land.
The paper seems inconsistent in its approach to the Single Farm Payment, with Macra looking for payments to be coupled back to productivity, however at the same time the document suggests that payment should not be moved to a flat basis. But arable farmers should get a payment based on the area farmed, with livestock farmers getting paid on the basis of stocking rates.
This call for re-coupling goes against the direction of EU policy over the past decade, with single farm payments decoupled in the Fischler reforms. Finally, farmers were being given the opportunity to farm as they wish, and that EU policy will continue with the proposals to remove the last two bastions, milk quota, and possibly beet quota.
The perspective and the theory behind the Fischler reforms were that farmers would adjust their production to meet market demand.
Yet, points included in the Macra report suggest that the single farm payment should continue to be a form of support in cases where markets returns “do not justify the costs of production”. This approach, and criteria such as stocking rates or arable area farmed, seem convoluted, and stray away from the general principle that farmers should farm the land to meet market needs.
Ultimately, if production is costing more than the market returns, economic principles would suggest that without direct market support, land will be converted to other uses, and perhaps support should be given to those who are proactive in converting their systems.
Is the current decoupled system unfair because it’s a “decoupled” system, or is it unfair because of the wide variation in single farm payments per hectare paid to farmers already in the system, based on production 12 years ago, with total inadequate support for new entrants?
CEJA, the European umbrella body for young farmers, looks for additional support to cover the extra costs of production due to the high production standards they have to meet. Perhaps it is this partially coupled support that the Macra paper refers to.
The Macra paper scores well in highlighting the extremely low numbers of our farmers who are under the age of 35, and looking for a reintroduction of installation aid and Early Retirement Scheme (ERS).
However, ERS is no longer payable once old-age pension income comes on stream, and would not provide any exit support to farmers aged over 65 (25% of Irish farmers, according to CSO statistics from 2010).
The Macra paper does not give much air to innovative Pillar 2 type schemes, such as access to capital or favourable interest rate loans for new entrants.
One of the new emerging principles is that CAP reform should provide greater help for farmers to withstand volatility due to fluctuating market returns and variable environmental conditions. CEJA places a lot of weighting on supporting young farmers through these “Pillar 2” type arrangements.
Ireland is not unique in terms of the demographics of its farmer population. Across Europe, 35% of farmers are older than 65, with just 7% under 35, and as a result there is much support for Macra’s suggestions across Europe. Hopefully the amendments to CAP will be to the benefit of all of Europe’s young farmers.
