Thousands face income cuts under new CAP system

It is critical that monies for re-distribution are targeted at active producers with low payments, writes John Bryan

YESTERDAY may have seen broad agreement on the final CAP reform package, but the full implications of what has been decided will take some time to digest.

However, there is no escaping the fact that tens of thousands of family farms will suffer a substantial income cut in the coming years. There will be a negative consequence for the wider sector and the economy.

IFA’s view from the outset has been that the proposals put forward by EU agriculture commissioner Dacian Ciolos were deeply flawed. Our position is based on detailed consultation with our members over the last three years as to what is best for the future of Irish agriculture.

Rather than shape the next Common Agricultural Policy (CAP) in a way that encourages sustainable food production, the commissioner chose to undermine the very farmers who would do this, by promoting a payment model that does not reward enterprise and investment.

From Ireland’s perspective, this reform was about achieving a framework that would allow the farming and food sector to realise the targets for export growth set down in the Department of Agriculture’s Food Harvest 2020 report. Unfortunately, the commission had a pre-determined approach to go in another direction. This is something that will have to be rectified in the mid-term review.

In addition, the EU will have to move quickly to put measures in place to ensure that farmers get more from the market place by ensuring equity in food supply chain.

IFA’s initial analysis shows that 50,000 of our most productive farmers will lose between 15% and 35% of their payment by 2019. Inevitably, this will have an impact on their income and their viability. It will undoubtedly put pressure on them to retain their productivity, given that it makes up such a significant proportion of their income.

The original Ciolos proposals would have seen deeper cuts to the single farm payment of our most productive farmers. Much progress has been made in the negotiations as a result of persistent and determined opposition from countries such as Ireland. Simon Coveney, the agriculture minister, and his officials resisted the commission proposals and put forward the approximation model.

From here, the focus will be on examining the implications of the deal and looking closely at the options available. It is critical that monies for re-distribution are targeted at active producers with low payments.

As part of that process, the IFA executive council will meet early next week and we will consult widely with our membership.

The Rural Development Programme is a complementary policy to the single farm payment, with measures that support farming activity in disadvantaged areas, the delivery of environmental benefits and encourage investment and restructuring in all sectors of agriculture.

A comprehensive package of rural development measures will be needed for vulnerable sectors and regions, and to encourage investment in agriculture. To ensure we maximise the benefits of the Rural Development Programme, the minister and the government must commit to 50:50 co-financing for Pillar 2. This must be reflected in the allocation for schemes in October’s budget.

Market supports, including intervention, APS, and export refunds, will continue to have a strong part to play in mitigating price volatility and cannot be eroded. On the dairy side, there is a real danger that the potential for expansion in two years will be hampered by some of the European Parliament proposals for production management measures after the abolition of quotas. This must be rejected outright by the minister.

Discussions around the CAP must be maintained from here on, and should lead to a wider debate about what the policy is about. The commission sought to impose certain changes which deviate from the core principles of the CAP. Inevitably there was a compromise at the end, but did the European Council and Parliament, which had co-decision for the first time, exert sufficient influence on the final outcome?

The next phase must be about re-orienting the CAP so that it delivers sustainably produced food for Europe’s 500m consumers and safeguards the farm family model.

*John Bryan is the president of the Irish Farmers’ Association

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