Those with €150k-plus income will have farm payments capped

Farmers receiving over €150,000 a year from the EU in farm payments are likely to have the sums capped in future under a new deal negotiated between the European Parliament and member states.

Disputes between members of the parliament and the EU states had threatened to hold up a decision on the Common Agriculture Policy reforms, requiring them to go to a second reading in the parliament that could well drag on into next year.

Such a delay, if it extended into next month, would have also threatened payments to farmers, especially those in receipt of rural development funds, Agriculture Commissioner Dacian Ciolos warned this week.

At present 80% of CAP payments go to the top 20% of intensive farm businesses as some countries continue to link the subsidies to production levels, the Lithuanian presidency pointed out.

Under the revised CAP, each farmer will have to receive at least 60% of the average national subsidy per hectare — a figure designed to remove the advantage bigger, industrial farms have at present.

MEP Mairead McGuinness, negotiating on behalf of the parliament at last night’s talks, said the agreement allows EU states to limit payments to farmers with a basic payment in excess of €150,000.

“Last night the council accepted that limits to higher payments was necessary, and a reduction of a minimum of 5% on amounts over €150,000 is now part of the CAP agreement, with the possibility for member states to impose higher cuts, or to place a cap on the amount which any farmer can receive.”

The agreement will allow next Monday’s agriculture committee to vote on the reforms. They will vote also on a report allowing for transitional measures for CAP payments next year.

Ms McGuinness said in 2014 direct payments will be based on the current system, but it will be with the allocation as provided for in the budget agreement. “This involves a reduction in payments to farmers in receipt of payments over €2,000 in order to keep the CAP spend within the limits of the new budget figures. The cut is expected to be of the order of 4%.”

On co-financing rates for rural development, member states accepted the parliament’s request to increase the rate for less developed regions on a voluntary basis to 85% but not for Ireland.

One of the biggest changes is that 30% of farm payments will be spent on measures designed to make farming and food production more sustainable and environment friendly.