CAP reform means less money for farmers
He said no one could doubt that Taoiseach Enda Kenny and his Irish negotiation team put in an enormous effort — but it is now a question of allocating a diminished budget in the fairest and most productive way.
nWhat is the cut in the budget for the Single Farm Payment, corrected for inflation, according to ICMSA figures? >>The budget for the SFP has been cut from €1.255bn in 2012 to €1.213bn. This reduction of €42m per annum is likely to be applied in 2013. It is not clear yet if this will be a linear deduction or a deduction in some other format from the 2013 payment. This is the reduction in nominal terms, and will be substantially higher in real terms, when inflation is taken into account. For a farmer with an SFP of €10,000, it will mean an annual cut of €340. This cut must also be taken in the context that farmers face additional cuts due to a National Reserve and a Young Farmers Scheme, leading to a total cut of possibly 5%. Given that farmer payments have been reduced by 13% already since the introduction of decoupling in 2005, due to modulation and the National Reserve, farmers payments will be cut by 21.3% in 2014 compared to their 2005 levels — and this does not take account of the convergence proposals which could have a very serious impact on individual farmers. These are massive cuts for farmers, particularly in the context that the EU is pushing for more market deregulation, leading to greater price volatility, and that these payments are declining in real terms.
*What are the details on price supports in the event of a market downturn, and the possible impact on Irish farmers?
>>It is likely that should a crisis arise, the proposed new Crisis Reserve for Agriculture would be implemented. While the details are still unclear, this will be funded by a cut in each farmers’ SFP every year. If a crisis in any sector arises, these funds of up to €2.8bn will be utilised, but if not used in a particular year, will be reimbursed to the farmer. What it means is that each year, a farmer’s payment will be reduced possibly by a further 1%, if applied as a linear cut, and the money used to support prices, in the event of a crisis.
*ICMSA says the EU has consistently left farmers at the mercy of multinationals and retailers. You recommend an EU Market Monitoring Agency to address profit margins along the food supply chain. How?
>>The EU Market Monitoring Agency is a concept developed along with our EU partner organisations in the European Milk Board. The balance of power in the food supply chain is broken, with too much power at retail level. The cheap food policy of retailers is crippling farmers, and clear recent examples of this are the horsemeat scandal and the price paid to farmers for liquid milk.
The role of the Market Monitoring Agency would be to establish costs of production along the food supply chain and profit margins taken by each link in the chain, and to set clear procedures for fair treatment of all links in the chain. It is clear that the EU has to date failed to address the food chain imbalance and action is needed now.
*ICMSA fears a cut in Irish rural development funding of as much as €39m per annum in EU funding. How do you think this money for schemes for such as REPS, AEOS, Disadvantaged Areas and on-farm investment grants should be prioritised by our Government?
>>In relation to the Rural Development or Pillar Two budget, the EU funding available will be cut from €352m per annum in the existing programme to €313m per annum in the 2014-2020 programme. This presents a major challenge for the Irish Government in protecting existing schemes that are of critical importance to farmers and the rural economy in general. The co-funding rate used and the level of national funding committed to the 2014-2020 Rural Development Plan will be critical. In terms of priorities under the Rural Development Programme, ICMSA believe that three schemes should get priority, a REPS type agri-environment scheme, the Disadvantaged Areas Scheme and on-farm investment grants. At present, farmers who have completed their term in REPS only have the option of participating in the AEOS type scheme. ICMSA believes that a whole farm agri-environment scheme like REPS in the past is required, and that it brought substantial benefits to the environment, farming and the rural economy since its introduction in 1994. The importance of the Disadvantaged Area Scheme was again highlighted in 2012 when atrocious weather made farming extremely difficult. It is essential that an adequately funded scheme for Disadvantaged Areas — which are to be renamed Areas of Natural Constraint — is put in place. Farmers want and need to continuously upgrade their facilities. A properly funded farm investment scheme to include animal housing, slurry storage and management equipment, milking facilities and a land improvement programme is required, and can act as a stimulus for increased activity not only on farms but also in the wide range of companies that service farming.
