Cap reform proposals about much more than divvying out the money

A decision on the figures is expected in early February.

Linking payments to land is not without its problems. Unless there is a system to limit the size of a farm in respect of which payments can be claimed or the actual level of payments (capping in EU speak), large landowners will continue to get large payments.

Farmers who rely on leasing land will see payments leak away to landowners in rental prices and efforts to pay public money under the Cap to active farmers will be thwarted.

Germany and England have already moved away from historic linked payments to a flat rate regional payment. Regions and farmers who lost money in the transition – which began in 2003 – have adjusted and, in Germany, exchequer support for biogas eased the pain somewhat.

In Ireland, it is the high cost livestock sector which is under the greatest threat from the new system. In 2011, direct payments from the EU agriculture budget represented 73 per cent of farm incomes in Ireland. On livestock farms, these payments represent an even higher proportion of farm incomes.

In France, where huge emphasis is placed on livestock production to maintain farming in remote and difficult regions, there is little appetite to reduce the level of support payments to a flat rate system favoured by the European Commission.

Fairness

If there is a reduced pot of money for direct payments and rural development, there has to be a focus on fairness and results. There will inevitably be an impact at farm level and there will be a significant impact in the input supply sectors.

We are about to witness a significant new era for agriculture. At its worst, it will be a bitter and divisive era about winners and losers; at best an era of renewed focus on production efficiencies delivering high quality food in an even more environmentally sustainable way. Returns to farmers from the marketplace will have to adjust to this new era.

But will they, and will the possibility of EU legislation on fair play in the food supply chain, help to deliver better returns to the producers of food? With an average farm income in Ireland at €24,461 in 2011, getting the balance right will be vital.

* Maireád McGuinness is an MEP