Budget Day brought €40m for extension of the Beef Data and Genomics Programme, €40m also for the Beef Sector Efficiency Pilot (based on the BEEP-S Scheme), and €5m for a new calf weighing measure to support beef farmers rearing dairy calves.
A €17m extension of the Sheep Welfare Scheme was also announced, in Agriculture Minister Charlie McConalogue’s bid to ensure no gaps in funding for farmers, after the Common Agricultural Policy ends on December 31, with the next CAP up to two years away.
Alongside the 2021 Budget, the real action for farmers is in Brussels, where major decisions are being made that will determine their prospects up to 2028.
EU decisions in the coming weeks and months will determine how Ireland’s €10.7 billion share of EU funding will be distributed in the agri-food industry over the next eight years.
But it will be 2023 before the new CAP comes into force, five years after EU Agriculture Commissioner Phil Hogan launched CAP reform proposals. Covid-19 intervened, along with the EU’s ambitious targets in climate change, the environment, and biodiversity, plus national targets in climate change and the environment, together spelling an uncertain future for farmers.
However, an 11% increase in the Department of Agriculture’s 2021 Budget, to €1.826bn, is injected to help ease the transition between the current CAP and the next one, while coping with Brexit and Covid.
It includes €79m of new funding (€23m from carbon tax and €56m from the EU) for agri-environment pilot measures to “inform the development of” a major new scheme follow-up to GLAS.
The tillage sector will be catered for with a ring-fenced €10m of the €79m; new initiatives on farm safety will also get some of the €79m funding, such as a new focus on safety in farmer training programmes.
More than €450m for schemes like GLAS and ANCs (disadvantaged areas), and €80m for TAMs investment on farms, will help bridge the gap to a transition CAP.
The department’s 2021 estimate also provides €13m in increased funding for sustainable development of fisheries, aquaculture and the wider seafood industry.
Bord Bia’s grant in aid has been increased by €4 million to €52.250m.
As well as maintaining existing agri-taxation measures estimated to benefit Irish farmers to the tune of €240m per year, the Budget included renewal of the Consanguinity and Farm Consolidation Stamp Duty Reliefs which were due to end on December 31.
A flat-rate Vat increase for unregistered farmers, to 5.6%, will be worth €12m per year to the sector, and farmers and all self-employed are to finally get the full Earned Income Tax Credit, which has been phased in over several years.
Mr McConalogue said an additional €39m for staff and infrastructure will enable his department to fulfil its expanded Brexit obligations to facilitate the agri-food trade at ports and airports.
He said the Government has set aside a €3.4bn recovery fund to support sectors, including agri-food and fisheries, particularly vulnerable to a no-deal Brexit and Covid-2019.
Meanwhile, the CAP budget up to 2028 is nearly in place, €386.73bn, with an additional €8bn of European recovery funding.
But consent is still awaited from the European Parliament.
The end of October is the expected date for all aspects of the budget to be finalised.
But the CAP rules up to 2028 will be another matter.
They will take longer to agree, which is why it will be 2023 before the new CAP comes into force, after two more years of negotiations.
Tuesday’s budget was, therefore, the first stage of Mr McConalogue’s task to dovetail policy in the transitional period with Programme for Government commitments, all fitting with preparations for the country’s CAP strategic plan.
He anticipates that the most significant CAP 2023-28 challenge will be the potential loss of unspent funds in the environmental scheme which will be mandatory as part of direct payments to farmers.
Under current proposals, if take-up of the eco-scheme among farmers is not as expected, the funds would revert to the European level, and would not remain in the Irish funds envelope.
“I would not like to see that happen, and I want to ensure it does not,” said the minister.
“Enormous efforts are being put in by the commission, the German EU presidency, and member states, to find a workable solution to address this issue,” said Mr McConalogue.
Direct CAP payments to farmers are to be capped at €100,000, and the European Commission has indicated that over the course of the next CAP, the convergence of payments will move to 75% of the average payment per hectare nationally.
“That is something we would fully support,” said the minister. But he warned, “There are still enormous challenges facing member states in reaching final agreement on the CAP legislative proposals.”
Outstanding issues include conditionality, and what agricultural environmental conditions and statutory management requirements farmers must observe, including a requirement to have a minimum area on farms for non-productive features, more accurately described as areas that support public goods.
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