Cap Policy Paper

JAN

UA

RY

2014

www.fiannafail.iefwww.facebook.com/fiannafailt www.twitter.com/fiannafailparty

CAP POLICY PAPER

FIANNA FÁIL POLICY PAPER

A NEW VISION FOR THE COMMON AGRICULTURE POLICY & FARMING IN IRELAND

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CAP POLICY PAPER - A NEW VISION FOR THE COMMON AGRICULTURE POLICY

AND FARMING IN IRELAND

“Our aim is to protect and develop the family farm structure of agriculture in Ireland and to give a fair return to all farmers irrespective of size or type of land farmed”

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Executive summary of Fianna Fáil Proposals

Harvest 2020:

Fianna Fáil supports the full implementation of Food Harvest 2020 which they introduced

when in government.

Market Actions:

In the long term farmers must get a fair return for their efforts in the market place and

strong policies are needed to ensure this.

Fianna Fáil will press that government

Implement an aggressive policy to ensure a fair price to primary producers for their

product.

Curb the overweening power of multiples and meat factories.

Insist on the immediate enactment and implementation of a statutory code of conduct

for the Grocery trade.

Implement in full the recommendations of the report of the Oireachtas Joint Committee

on the regulation of the grocery trade in Ireland.

Take action to ensure the open and proper operation of the free market in both the live

and meat trade to ensure a proper competitive market exists for farmers products

In particular barriers to free trade for livestock particularly with our nearest neighbour

Britain must be overcome.

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Support the growth and value of food and beverage exports and examine where import

substitution is possible particularly by the production of quality products with a special

emphasis on the development of horticulture and fruit production.

Common Agricultural Policy (CAP)

For the first time ever the funding for the CAP has been reduced with a 3% funding cut in

Pillar 1 and a 14% in EU funding for Pillar 2.

Government co-funding for Pillar 2 is at 42% (not 46% as stated) not the 50%/50% co-

funding promised.

Fianna Fáil proposes 50/50 co-funding by Government and the transfer of €300m of

Pillar 2 funding to Pillar1.

Pillar 1. Direct Payments

BNS (Basic National Scheme):

Distribute €300m of funds transferred from Pillar 2 to Pillar 1 5% to all farmers from

2015 on. This will mean that there will be no reduction in payment because of reduced

Pillar 1 funding and allocation for young farmers, national reserve and crisis fund

Implement EU agreement in relation to farmers with less than average payment. This

will increase the payments of all farmers with less than the average payment at present

with the minimum Basic National Scheme being 60% of the average payment by 2019

To fund this (€70m) reduce all payments from the top down rather than as proposed by

taking a percentage off all farmers with over average payments and impose in 2015 a

ceiling of €150,000 on all Pillar 1. Payments payable to one farm enterprise

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This will protect farmers with between the average payment and over €400/ha from any

cutback in BNS and mean that many farmers with higher payments than that will only

face cuts in their BNS in later years of this CAP (see details in document)

Between BNS and Greening the Minister has proposed a maximum payment of €700ha.

Fianna Fáil policy is to impose a ceiling by 2019 that will ensure that no farmer with

between the average payment €264/ha and €400/ha will have a cut in their BNS and to

raise the funding for farmers with below average payments per ha. this way. This would

protect 86% of farmers from cuts to their BNS payment

Greening:

Implement flat greening from 2015 rather than as the Minister proposes variable

greening. Adhere to the principle of equal payment for equal work.

Pillar 2 Rural Development Programme

50/50 funding as opposed to the 42% proposed by the Minister.

This will facilitate the transfer of €300m to Pillar 1 from 2015

ANC (DAS) funding of €234m per annum as opposed to the €195 proposed. Will facilitate

a 20% increase in ANC (DAS) payments

Rate of payment under this scheme should relate to the level of constraint in each area.

Maximum payment under Glas Scheme (Agri-environmental) should be €10,000 not

€5,000.

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No farmer in receipt of direct payments over €50,000 should be eligible for ANC

payments or Glas payments.

Young farmers should be assisted through the introduction of an installation aid scheme.

This is necessary to achieve the aims of Harvest 2020.

Farm modernisation funding should be increased from €155m to €290m with grant aid

levels at higher levels than proposed in order to attract investment.

Leader: Funding for projects should be maintained at present levels and not cut by over

50% from €340m to €153m.

Red tape and compliance costs should be minimised not made worse as proposed.

A suitable range of extra measure should be put in place to encourage organic farming.

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Fianna Fáil’s Vision for a New CAP

Key Points

• Minister Coveney has failed to produce a fully funded and fair CAP reform. He has

protected powerful vested interests and has attacked the most vulnerable sectors of

Irish agriculture. His policies are based on historic grant payments rather than objective

criteria protecting the top 15% of recipients at the expense of the majority.

• His failure to fully co-fund Pillar 2 is a testament to his lack of commitment to farmers in

disadvantaged areas and to environmental schemes.

• Fianna Fáil is committed to a fair CAP based on objective criteria and where the BNS

roughly relates to number of LU/ha rather than grants paid over 10 years ago. A new CAP

should reflect current realities and not the situation 13 years ago.

• The principle of equal reward for equal work should apply to the Greening payment.

• Pillar 2 should be funded 50/50 and we are fully opposed to the swinging cuts as

proposed by the Minister.

• Agri-environmental schemes must give a realistic return to farmers in financial reward.

No penalties should apply for non-compliance with scheme conditions due to the

weather. Red tape must be reduced rather than as proposed increased.

• Penalties should be reviewed to be proportionate to the non-compliance this is not the

case at present. A new Yellow card system should be introduced. Unless intentional

deception is found no retrospective deductions or penalties should apply to map errors.

• ANC/DAS payments rates should be proportionate to the level of constraint in an area.

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Overall Financing

Multi Annual Financial Framework

The Multi-Annual Financial Framework set out the EU Budget for 2014-2020

including CAP. The CAP budget was pushed down to €373 billion for 2014-2020,

compared to €421 billion over the previous MFF, indicating an 11% decrease.

This is the first time ever there was a reduction in CAP funding.

CAP Funding in Ireland

Pillar 1 – The Single Farm Payment to Ireland has been reduced by €42m per annum

from €1.255 bn to €1.213 bn, a 3.3% cut.

With inflation at 7% this in fact is a 10% cut in real terms over the seven period.

Pillar 2 – €2.2bn in EU funding for Ireland €313m/year. This is a 14% decrease in EU

funding.

With inflation at 7% this is a 21% cut in EU funding over the seven year period

Overall Ireland will see a real reduction in EU funding of 10% Pillar 1 and 21% in

Pillar 2.

What is at stake now is the distribution of this money within the framework of the

CAP agreement brokered by Minister Coveney in June 2013 under the Irish

Presidency.

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Current Spending

These figures outline the current CAP system in Ireland. They clearly indicate that

Minister Coveney’s proposals protect a minority of farmers without any basis on

objective criteria.

Current Pillar One- Single Farm Payment Distribution

• 70% of farmers get less than €10,000 single payment




• The top 2% of farmers get 12% of the fund

Distribution of payments per HA. The vast majority of farmers nationally get

less than €500/ha single farm payment

• 40% get less than €200/ha




• 6% get more than €500/ha

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Distribution of payment per hectare broken down by

County

Payment less than €200- €300- €400- over Total

€200 €300 €400 €500 500

Munster

Kerry 3603 1955 1191 445 379 7,573

Cork 2690 2875 3477 2063 1721 12,826

Clare 2136 2126 1179 377 199 6,017

Tipperary 1141 1689 2023 1033 988 6,874

Limerick 1386 1520 1167 515 468 5,056

Waterford 437 543 723 359 326 2,388

________________________________________________________________________

Munster 11,393 10,708 9,760 4,792 4,081 40,734

Connacht

Rosco’n 1763 2040 1172 395 247 5,617

Sligo 1717 1367 555 161 84 3,884

Leitrim 2004 963 273 74 36 3,350

Mayo 5266 3175 1910 653 273 11,277

Galway 4273 3401 2580 1004 535 11,793

________________________________________________________________________

Connacht 15,023 10,946 6,490 2,287 1,175 35,921

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Leinster

Offaly 746 792 769 366 325 2,998

Laois 425 615 874 508 489 2,911

Kilkenny 407 748 1152 603 506 3,416

Wexford 600 826 1517 719 505 4,167

Carlow 191 354 584 293 207 1,629

W’meath 720 883 739 334 231 2,907

Louth 243 285 540 226 189 1,483

Dublin 131 123 270 56 43 623

Wicklow 700 598 530 210 124 2,162

Kildare 402 503 638 272 205 2,020

Longford 559 802 570 261 143 2,337

Meath 640 834 1181 545 510 3,710

Leinster 5,764 7,363 9,364 4,393 3,477 30,361

Ulster

Donegal 4,945 1640 810 335 284 8,014

Monaghan 754 998 1125 593 481 3,951

Cavan 1387 1454 1129 467 280 4,717

Ulster (part) 7,086 4,092 3,064 1,395 1,045 16,682

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Farm Sizes in Ireland

• No. of farms of less than 32ha 68,464 (55%)

• No. of farms of less than 50ha 95,628 (78%)

• No. of farms over 50ha 27,446 (22%)

• No. of farms of over 100ha 5,406 (4%)

• Average Farm size 32ha

• Farm size generally increases as the rate per hectare increases

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Historic Payments versus Current Productivity Payments

These statistics show there is no basis for payment levels above €400 based on the

objective criteria of Livestock units per/hectare as a measure of productivity. Current

payments are based on the livestock grants paid in the years 2000, 2001 and 2002, the

values of entitlements purchased and stacking.

Payment /ha 2007-2013 Payment/ha based on historic grants if based on Lu/h

€0 €100

€0-20 €76

€20-50 €67

€50-100 €98

€100-150 €153

€150-200 €214

€200-264 €277

€264-300 €318

€300-400 €358

€400-500 €390

€500-600 €392

€600-700 €401

€700-800 €395

€800-900 €407

€900-1000 €369

1000+ €416

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Arable Farmers – Distribution of Single payment

Less than €264/ha 3,024

€264/ha to €400/ha 7474

€400/ha to €500/ha 3,109

€500/ha to €600/ha 1,324

€600/ha to €700/ha 601

€700/ha to €800/ha 260

Over 800/ha 285

Total 16,077

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The single farm payment is to be broken into two schemes -

the Basic National Scheme and the Greening Payment

Fianna Fáil proposes that 50/50 funding of Pillar 2 would take place and that

€300m of Pillar 2 funds would be transferred to Pillar 1 from 2015 to

maintain general farm incomes. This equates to an extra 5% Pillar 1 funding

This would largely offset the cuts in funding in Pillar 1 post 2013 and the

provision of funding for the National Reserve, Young Farmers and the Crisis

Fund

Basic National Scheme

€70m has to be transferred to farmers with below average payments (€264 per Ha)

under the CAP agreement. The minimum payment by 2019 must be 60% of the average

payment at a minimum

The Minister is proposing to take that €70m from all farmers with above average

payments. However this does not take into account objective criteria or productivity.

To progressively fund this change between 2015 and 2019 Fianna Fáil propose the

immediate introduction of a ceiling on payments to any one farm enterprise of €150,000

and the exclusion of corporates such as Airport Companies and other non-core farming

commercial enterprises from entitlement to the scheme and the gradual reduction over

the next six years of the maximum amount per hectare payable

This will protect farmers with between the average payment and over €400/ha from any

cutback in BNS and mean that many farmers with higher payments than that will only

face cuts in their BNS in the latter years of this CAP

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A table showing the comparison between the Minister’s proposals for Pillar 1. Payments

by 2019 and the Fianna Fáil proposals are included at the end of this section

Fianna Fáil also propose measures to protect farmers with high payments/ha on

relatively small hectares that would be at least as advantageous as the Minister’s

proposal.

Fianna Fáil will therefore under the Basic National Scheme totally protect all farmers

with less than €400/ha from any cut whatsoever

This proposal adheres much more closely with objective criteria and productivity

enabling Irish agriculture to meet Food Harvest 2020 objectives.

Greening

Greening will now constitute 30% of the Single Farm Payment. The Minister wants to

link this 30% to the payment levels received in the original de-coupling stage of 2001. In

other words the Minister is basing his policy for this new scheme on an event that took

place 13 years ago.

Fianna Fáil believes that the greening payment should reflect the fact that the burden of

meeting greening criteria is equal for all farmers (with the exception of cereal farmers).

Fianna Fáil therefore believes that the greening payment should be a flat payment to all

farmers to reflect the equal work done to fulfil the criteria and not as the Minister

proposes a payment linked to grant payments 13 years ago.

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Sheep Grassland Scheme

• The Minister’s proposal will have to be modified to ensure that farmers with low

payments/ha who are under the minimum payment of €150 (€193) get the benefit of it

being included in the single payment

Ceilings

Fianna Fáil believes the maximum payment of €150,000 should immediately come into

force. (The Minister should have negotiated an optional cap of €50,00 as proposed by

Fianna Fáil)

By 2019 a maximum Direct Payment (BNS and Greening) of approximately €400 per ha

would be in place (as opposed to the €700 proposed by the Minister) in order to fund

the mandatory increase in lower payments

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Payments in 2019 compared to existing payments-

Ministers Proposal versus Fianna Fail proposal.

Combination of BNS and Greening payment

Existing Payment Minister’s proposal Fianna Fáil Proposal +/-

Up to €150/ha €150/ha €193/ha €43

€200/ ha €204/ha €233/ha €29

€277/ha €264/ha €277/ha €13

€359/ha €328/ha €334/ha €6

€400/ha €357/ha €363/ha €6

€450/ha €391/ha €398/ha €7

€460/ha €398/ha €400/ha €2

€470/ha €405/ha €400/ha -€5

€500/ha €426/ha €400/ha -€26

€600/ha €496/ha €400/ha -€96

€700/ha €565/ha €400/ha -€165

€800/ha €634/ha €400/ha -€234

€900/ha up €700/ha €400/ha -€300

105,000 farmers are better off with the Fianna Fáil proposal and 16,000 farmers are better

off with the Ministers proposal. This is more than 85%

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Pillar 2 Rural Development Programme

Minister Coveney’s Proposals

Allocation is a decrease of 30% on the 2007-2013 allocation when inflation is taken into

account

The Minister has failed to honour the commitment of the Taoiseach to 50/50 funding

Actual co-funding if 42% not 46% as claimed by Minister as he double counted €170m of

payments for the 20070-2013 CAP that will be paid out this year and next.

Promise to farmers in disadvantaged areas in relation to Pillar 2 have been reneged

upon

The proposed Glas scheme (Agri-environmental Scheme) will be very unattractive to

many farmers because of the proposed red tape and conditions of the scheme. An

example of this is the fact that 80% of the farmers in commonage will have to participate

together for any farmer in that commonage to take part in the scheme.

The maximum funding per farmer for Glas is less than half that for REPs 4.

The DAS allocation is cut by 24% compared to the 2007-2013 actual spend.

Leader funding is cut by 55%.

While worthwhile in itself it could result in over €100m of money provided for

environmental purposes and income support for farmers on poorer land being spent on

professional fees for this scheme as the rate of charge for each test is €30.

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Fianna Fáil proposals

50/50 funding should be provided as promised by the Taoiseach.

This would give and extra €610m over 7 years or €87m per annum.

Areas of Natural Constraint:

- The allocation for the Disadvantaged Area Scheme (DAS) now known as Areas of

Natural Constraint (ANC) should be increased from €1,235m or €195m per annum to

€234m per annum. This would bring it in line with the expenditure under the 2007-

2013 scheme. This would on average increase ANC (DAS) payments by 20%.

- The rate of payment under the ANC under this scheme should relate to the natural

constraint in each area.

Agri-environmental Scheme:

- The prosed terms of the Glas and Glas* schemes should be reviewed to make them

more accessible to the vast majority of farmers and to make them attractive to

farmers involved in high nature farming and farming in high value ecological areas.

- The maximum payment under this scheme should be increased to €10,000.

Young Farmers: Installation Aid and National Reserve

- A provision of €60m or nearly €9m per annum is proposed for An Installation

Scheme for young farmers. This is a major omission in the Ministers proposal as

Installation Aid is important to provide working capital to young farmers.

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- All young farmers irrespective of how long they are farming should get preferential

access to entitlements from the National Reserve

Leader:

- The funding for Leader should be increased to €300m compared to the €155m

allocated. The benefit of this investment to the rural economy in job creation and

services is vital at this time and a 55% cut a proposed will have devastating effect.

General:

- All schemes must be reviewed to ensure a minimum of red-tape and a minimum

amount of compliance and planning cost so as to ensure the farmer gets the

maximum return form the Rural Development Programme

- All penalties must be reviewed to ensure they are proportionate and Fianna Fáil

proposes the introduction of a yellow card system for small infractions of the rules.

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Fianna Fáil - Pillar 2 Proposals based on 50/50 funding

Measure RDP 2007-2013 2014-2020 2014-2020 IFA

Min’s Proposal FF Proposal demands

Installation/Retire €236m €60m €60m

Farm Mod €155m €290m €290 €290m

DAS €1,618m €1,235m €1,643m €1750m

Agri-Environ €2,453m €1,400m €1,400m €1750m

Leader €340m €153m €300m €217m

Other €23m €21m €23m €105m

Genomics €364m €364m €468m

Unallocated money €307m

Transfer to Pillar 1 €300m

Total €4,825m €3,770m €4380m €4621m

The Fianna Fáil proposal recognises the sharp cuts Pillar Two has suffered under the MFF

and fully commits to 50/50 co-financing.

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Cap Policy Paper

Documents

aggressive policy

common agricultural

ireland2 cap policy

reduced pillar

farmers products

eu funding

government cofunding

young farmers