Irish farm income prospects from 2023 onwards are unknown, after hugely varying interpretations emerged of the effects of the EU’s new Common Agricultural Policy (CAP).
Negotiations on the new CAP continue at EU level.
Meanwhile, results of preliminary modelling exercises by the Department of Agriculture, Food, and the Marine have been variously interpreted, including 55,000 Irish farmers facing EU income support payment cuts of up to 40%.
However, the modelling is “totally misleading”, according to the Irish Natura Hill Farmers’ Association (INHFA).
Instead of results “implying that no farmer will gain”, INHFA president Colm O’Donnell said that over 72,000 farmers, or 60% of all farmers, stand to gain.
Agriculture Minister Charlie McConalogue has pledged to ensure fair implementation of vital CAP financial supports for farmers.
He noted that the options available to member states will not be clear until CAP negotiations are concluded.
He said the aim of the CAP is to support all farmers, with redistributive mechanisms to create a more even payment landscape between farmers as a core EU policy.
Income prospects are clouded by the very slow pace of CAP negotiations between the Portuguese presidency (representing the EU-27 member states), the European Parliament, and Commission.
Negotiations
These negotiations will continue in the last week of May, ahead of a May 31 deadline for an agreement to be reached.
After that, the Portuguese presidency comes under even more intense pressure to get results, before it hands over to Slovenia on June 30.
Time is pressing because the member states need agreement on the reformed CAP before they can draft their national CAP Strategic Plans, which will outline the actions to be taken nationally, and must be submitted to the EU Commission by the end of the year.
But huge parts of the future CAP remain for negotiation at a “super-trilogue” on May 25 and 26.
A meeting of EU agriculture ministers has been rescheduled from May 30 to May 26 and 27, to coincide with the end of the trilogue which the Portuguese presidency hopes will bring CAP reform to a conclusion.
Meanwhile, the Irish Farmers Journal said last week in a report on DAFM modelling results that the reform will inflict “the biggest hit” on 55,000 farmers with payment entitlements over the €260 per hectare average, but there will be no gains for those with smaller entitlements.
The only farmers’ organisation to publicly react to the DAFM modelling of future CAP payments is the INHFA.
It condemned the DAFM’s implying that no farmer will gain, with INHFA President Colm O’Donnell asserting that over 72,000, almost 60% of all farmers, would gain from 100% convergence in the reform, or over half of farmers would gain substantially from 85% convergence.
Mr O’Donnell said the DAFM modelling is totally misleading because it excludes the new eco-schemes in the CAP reform.
Schemes
Eco-schemes are a new instrument to reward farmers who go a step further in environmental care and climate action, in keeping with the future CAP’s intended crucial role in transition towards a sustainable food system and EU Green Deal targets.
Mr O’Donnell said DAFM modelling also excludes the Complementary Redistributive Income Support proposal to protect farmers on small holdings who have higher payments.
The EU-wide independent ARC2020 non-governmental organisation also commented on the DAFM modelling, saying it is very difficult to comment on its robustness, but it excludes many important factors such as redistributive payments coming from capping and degressivity, and eco-schemes.
ARC2020 also questioned comparisons between the 2019 baseline of the modelling which refers to basic payments and greening, while future years refer only to the new Basic Income Support for Sustainability.
However, speculation on farm income prospects for 2023 and onwards is likely to continue and intensify until EU negotiators agree definitions of an ‘active farmer’, strategic plan requirements from member states, support for young farmers (likely to fall between 3% or 4% of national pillar 1 envelopes), and all aspects of farm income support such as capping and degressivity (which may or may not become compulsory), and payment convergence levels (which will end up at between 85% to 100%).
Also yet to be agreed is the minimum percentage of CAP payments for eco-schemes, somewhere between 20% and 30%; how much flexibility member states have in designing eco-schemes; and what environmental actions will be mandatory for farmers getting CAP payments.
For example, the latter may include establishment of pesticide and fertiliser buffer strips along all water courses, minimum shares of farmland devoted to non-productive features, and payment for landscape features.
Changes to public intervention and private storage aid for dairy products and other market and crisis management tools are also being negotiated.
For example, their availability may be extended to all year round.
For dairy farmers, CAP reform could also bring a Voluntary Production Reduction Scheme (but with an initially proposed accompanying levy on expanding producers now ruled out).
