Difficult discussions lie ahead after last week’s failure of EU institutions to progress Common Agriculture Policy talks, said Agriculture Minister Charlie McConalogue.
“Our farmers need this, and time is running short if we are to have it in place by January 2023.
"The alternative does not bear thinking about. However, we must ensure that we deliver a CAP that will have the maximum flexibility for us to make our own decisions.”
He said member states and the European Parliament remain some distance apart on issues which are complex and difficult to resolve and will require compromise.
The European Parliament wants 25% of the budgeted direct payments for farmers ring-fenced to finance new eco-schemes, a flagship element of the “greened” CAP, to encourage more sustainable farming.
The Parliament would allow 22%% in 2023 and 23% in 2024.
Eco-schemes
Eco-schemes range from agro-forestry to organic agriculture, and from precision farming to carbon farming.
What brought negotiations with the member states crashing down last Friday was member states agreeing 25%, but with a loophole of just 18%, in case farmers reject eco-schemes, in which case unused funds over 18% would go back into farmer payments.
This was interpreted by MEPs as provocative, they came back with a counter-proposal which member states rejected, and negotiations were called off .
In the background, many other issues are not agreed, Of particular interest to Irish farmers is the gap between the Parliament wanting all payment entitlements by 2026 to have a value of at least 100% of the average, within a country.
The member states wouldn’t go beyond 85%.
Both sides were agreed on redistribution, in one form or another, of 10% of direct payments.
Environment and Climate
There is disagreement also over how much of the European Agricultural Fund for Rural Development (EAFRD) is spent on environmental and climate-related objectives.
The parliament is at 37%, member states at 35%.
The basic point of disagreement between governments and the European Parliament is how much of the €387 billion CAP budget should be set aside for greener kinds of farming.
Arguments over this have revealed divergence between governments, EU officials and MEP.
At behind-the-scenes meetings, there will be efforts to reconcile the divergence, before the next set-piece negotiations in Luxembourg on June 28 and 29.
German agriculture minister Julia Klöckner hinted at the negotiation problems, saying excessive demands on climate and environmental protection will make the reform impossible to implement.
“This is not about a revolution, it is about a reform that takes everybody on board and ensures our food supply,” she said.
Member states, including Ireland, also want as much leeway as possible to spread EU funds as they see fit, and have strongly rejected mandatory capping and redistribution of CAP funds.
Agriculture Commissioner Janusz Wojciechowski said, “If we hadn’t had the pandemic, I would have been able to make visits to all the member states and I would have been able to actually engage with ministers and with agricultural organisations.
"Unfortunately, that pandemic got in the way.”
Farmers organisations directed much of their unhappiness over the CAP reform at him, with, COPA-COGECA, representing EU farmers and their co-ops, saying the failure to conclude talks was “foreseeable due to the weakness and poor understanding of the Agriculture Commissioner regarding the reality of farming in Europe.”
Also under pressure is Portugal’s Maria do Céu Antunes, President of the EU Council of agriculture ministers.
She is now unlikely to lead the way to a CAP deal before Slovenia takes over the presidency on July 1.
Agri-food industry
Meanwhile, the entire EU agri-food industry must wait for agreement on the new €387 billion CAP which will shape how they go about their business up to 2028.
Already, they are following rules of a transitional CAP for 2021 and 2022, because the Covid-19 pandemic threw EU decision making into disarray.
Without an early CAP agreement, member states will not have enough time to draft national CAP strategic plans of actions to be taken nationally, which must be submitted to the EU Commission by the end of the year.
These plans are a new CAP instrument launched by by former Commissioner, Ireland’s Phil Hogan, in his 2018 CAP reform proposals.
Unless national CAP strategic plans are finalised this year, there may not be enough time to start the new CAP on January 1, 2023.
ICMSA President Pat McCormack said the Irish family farm model would be critically undermined by the CAP deal as proposed, and Ireland must insist member states have the flexibility to address country-specific issues in any final deal.
Before talks collapsed last week, ICMSA proposed that farmers under a defined level of payment be exempted from convergence.
Mr McCormack said the focus should be on total direct payments to an individual farmer rather than on payment-per-hectare.
He said eco-schemes are a deduction from farmers and the rural economy.
IFA President Tim Cullinan said Minister McConalogue correctly identified the danger of CAP making more farmers unviable.
“The focus between now and the resumption of the talks next month should be on securing the maximum flexibility that will deliver the best deal for Irish farmers”.
“The real problem here is that the EU is trying to achieve increased environmental ambition, but without increased funding.
“Under the current proposals, a cohort of family farms in Ireland will suffer a triple whammy due to so-called eco schemes, convergence and mandatory redistribution proposals,” said Mr Cullinan.
“Many of these are our most productive farmers. Our grass-based system is the most carbon efficient in the world, yet the Commission and the Parliament are going to destroy them.”
Macra na Feirme National President John Keane said it was disappointing to see only 3% of direct payments would be ring fenced for young farmers.
The European Council of Young Farmers wants 4% of payments.
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