Reduced payments for some farmers under new Common Agricultural Policy

Almost €600 million in European Union direct payments to farmers are to be redistributed from those who had been earning the most towards smaller and medium sized farms by 2027 under the new Common Agricultural Policy (CAP), The Irish Times understands.

In all, 10 per cent of the overall payment amount available for farmers in direct payments it to be “used for giving an extra top up for smaller farms,” a senior EU official said.

“Almost €600 million will go into the redistributive payment,” the official said. “It’s in the name — there’s a redistributive effect. This is how the policy was resigned in terms of reaching a more fair cap. That means that you ensure distribution among the beneficiaries.”

Qualifying smaller and medium farms will receive a higher amount for the first number of hectares counted towards the direct payments. In turn, farmers that previously received the largest overall CAP payments are to see their direct payment earnings decrease.

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“There will be winners and losers in terms of the CAP, and that’s going to cause a little bit of tension within the industry,” Midlands—Northwest Fine Gael MEP Colm Markey told The Irish Times.

“It’s going to redistribute funding from certain sectors that would have had more intensive production in the past.”

Minister for Agriculture Charlie McConalogue said a “few hundred farmers” will see reduced payments.

“For the vast majority of farmers ... the difference will be marginal either up or down marginally,” he said.

“For small numbers some could be up significantly, some could be down significantly.”

“On the balance, the pot is staying the same”.

Top-up funding

The change is due to Ireland implementing a process that has been under way in Europe for over 15 years known as convergence: to even out the level of payments received by farmers, moving away from premiums being granted to some intensive farms as in the past.

Following years of fraught negotiations over the €387 billion CAP — the EU’s single largest budget item — member states, the European Commission, and the European Parliament agreed that the minimum payment per farmer should be brought up to at least 85 per cent of the average payment.

Mr McConalogue said that while in the previous CAP the maximum payment for any one farm was €150,000 euro, it would now be €66,000.

“That is so that we can actually ensure that we have as many viable, sustainable family farms in the country as possible,” he said.

“There will be a few hundred of the farmers who would have been over the over €66,000 mark will be impacted by those.”

Asked if he believes larger farms will remain viable when they’re receiving reduced payments, Mr McConalogue pointed to supports under Pillar II of the CAP which includes national funding.

He said that Pillar I of the CAP is direct payments to farmers and is entirely made up of central European funding.

Mr McConalogue said national governments can co-fund Pillar II “and we’re bringing an extra €1.2 billion to the table ... for this CAP compared to the last one, which is 50 per cent up”.

He said: “where it’s within our capacity, we’re backing farm families in every way we can and through that pillar, significantly increased Pillar II funding. That’s how we’re doing it and that’s something that will benefit all farms.”

Tightened rules

Ireland’s Strategic Plan for administering the CAP, launched on Tuesday, was drawn up following years of negotiations between Brussels and Dublin on targets would be met.

In a letter earlier this year, European Commission officials expressed concern that it was unclear how the Irish government’s plans for climate and biodiversity programmes could achieve their intended aims.

The negotiations led to the Government tightening proposed rules for crop rotation, increasing the ambition on stocking rate rules, and upping its organic farming goals — which are now to increase the land farmed organically by 300 per cent.

The Irish Government also tightened an ecoscheme that aims to limit the use of nitrogen fertiliser and make its use more efficient through GPS-controlled spreading.

As a measure to preserve biodiversity, language in the Strategic Plan was tightened to ensure “that the removal of hedges is exceptional, and is only taking place on a very limited area and really when there is no other solution possible,” a EU official said.

The Irish Government also agreed to assess and report midway on the progress of a suckler carbon efficiency programme, which aims to reduce methane emissions by breeding cows that produce less carbon. If it doesn’t achieve its aims, the programme could be revised midway through.

This is so the Commission can assess “what we have expected really turns out to be the reality, and if not we can revise it,” an EU official said.

Organic funding

Announcing Cabinet sign-off for the new CAP worth almost €10 billion to Irish farmers over five years, Mr McConalogue said it is “a historic day for farm families and for the entire Agri-Food sector”.

He said: “I believe it’s a farmer friendly, fair and well-funded Common Agricultural Policy program.”

Minister of State Pippa Hackett highlighted funding to encourage organic farming in the CAP saying the €250 million on offer is a five-fold increase in what was previously available.

The Green Party senator said: “This will support farmers as we achieve the target set out of the Programme for Government of farming 330,000 hectares organically.”

Martin Heydon, the Fine Gael junior minister said a number of funding schemes will have “built in health and safety training”.

He said “it’s a step change in how farmers health, safety and wellbeing is integrated into the CAP.

“To date this year ten people have lost their lives on Irish farms and beyond the individual tragedy for those families and their communities this also is a really significant challenge to social sustainability of the sector.”

He said the measure “will ensure we reach a wider audience of farmers than we have in previous CAPs while also targeting those most at risk.”