State must defend €1.6bn share in Cap funds at EU budget talks

OPINION:OVER THE coming months, important decisions are going to be made here and in Europe that will hugely affect the future direction of agriculture in Ireland.

Tomorrow’s Day of Action will be marked by thousands of farmers gathering in Dublin to deliver the message that achieving the right outcome is essential for the future prospects of Irish agriculture and the agri-food sector.

The expectation is that, next month, the Common Agricultural Policy budget will be agreed as part of the overall EU budget for 2014-2020. It’s worth remembering that the Cap brings €1.6 billion of EU funding into the Irish economy annually.

This is circulated in the rural economy, in particular, through expenditure by farmers on goods and services. For consumers, the Cap delivers sustainably produced food at reasonable prices, which meets the highest environment and animal welfare standards, with guarantees on food safety and traceability.

For farmers, the Cap is a vital income support, underpinning production and providing a mechanism for farm families to deal with increasing price and cost volatility. Farming, the agri-food sector and related inputs and services support 300,000 jobs across the economy, creating output of €24 billion in value annually. Across Europe, farming and the food sector support 40 million jobs.

Only last week, European Commission president José Manuel Barosso highlighted the importance of the “growth-friendly aspects” of the EU budget. I firmly believe that a strong Cap can deliver jobs and growth. The Government recognises the potential of the agri-food sector to contribute to our economic recovery, but to achieve this it must secure a fully-funded Cap budget.

Along with the budget negotiations, we need Minister for Agriculture Simon Coveney to toughen his stance against commission proposals on the distribution of the Cap payments. To put it simply: the commission wants to flatten payments across the country, regardless of land type, enterprise or production levels. This bears no relation to reality. It will undermine production in this country with a negative impact on our output and growth potential.

The Minister is seeking an alternative solution, which he says would limit the negative impact on production. There is a danger of a false sense of security about the level of cuts that the commission is hell bent on achieving. Let me be clear: what European commissioner for agriculture Dacian Ciolos wants to do would be hugely damaging for our sector and the Minister cannot agree to a Cap deal that would derail our plans for expansion.

In parallel with this, discussions on the make-up of December’s budget are taking place. Following two years of growth, farming is experiencing a very difficult year in 2012. A combination of dreadful weather, soaring input costs and falling prices in some commodities is affecting profitability and output at farm level.